Correlation Between Astra International and Voestalpine
Can any of the company-specific risk be diversified away by investing in both Astra International and Voestalpine at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Astra International and Voestalpine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra International Tbk and Voestalpine AG PK, you can compare the effects of market volatilities on Astra International and Voestalpine and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Astra International with a short position of Voestalpine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Voestalpine.
Diversification Opportunities for Astra International and Voestalpine
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astra and Voestalpine is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Voestalpine AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voestalpine AG PK and Astra International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Astra International Tbk are associated (or correlated) with Voestalpine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voestalpine AG PK has no effect on the direction of Astra International i.e., Astra International and Voestalpine go up and down completely randomly.
Pair Corralation between Astra International and Voestalpine
Assuming the 90 days horizon Astra International Tbk is expected to generate 1.36 times more return on investment than Voestalpine. However, Astra International is 1.36 times more volatile than Voestalpine AG PK. It trades about 0.07 of its potential returns per unit of risk. Voestalpine AG PK is currently generating about 0.0 per unit of risk. If you would invest 610.00 in Astra International Tbk on September 19, 2024 and sell it today you would earn a total of 19.00 from holding Astra International Tbk or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Astra International Tbk vs. Voestalpine AG PK
Performance |
| Timeline |
| Astra International Tbk |
| Voestalpine AG PK |
Astra International and Voestalpine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Voestalpine
The main advantage of trading using opposite Astra International and Voestalpine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Voestalpine can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Voestalpine will offset losses from the drop in Voestalpine's long position.| Astra International vs. Allison Transmission Holdings | Astra International vs. Luminar Technologies | Astra International vs. Lear Corporation | Astra International vs. BorgWarner |
| Voestalpine vs. ArcelorMittal SA ADR | Voestalpine vs. Gerdau SA ADR | Voestalpine vs. POSCO Holdings | Voestalpine vs. HUMANA INC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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