Correlation Between Mandom Indonesia and Astra International
Can any of the company-specific risk be diversified away by investing in both Mandom Indonesia and Astra International 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 Mandom Indonesia and Astra International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mandom Indonesia Tbk and Astra International Tbk, you can compare the effects of market volatilities on Mandom Indonesia and Astra International 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 Mandom Indonesia with a short position of Astra International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mandom Indonesia and Astra International.
Diversification Opportunities for Mandom Indonesia and Astra International
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mandom and Astra is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mandom Indonesia Tbk and Astra International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra International Tbk and Mandom Indonesia 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 Mandom Indonesia Tbk are associated (or correlated) with Astra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra International Tbk has no effect on the direction of Mandom Indonesia i.e., Mandom Indonesia and Astra International go up and down completely randomly.
Pair Corralation between Mandom Indonesia and Astra International
Assuming the 90 days trading horizon Mandom Indonesia Tbk is expected to under-perform the Astra International. In addition to that, Mandom Indonesia is 1.68 times more volatile than Astra International Tbk. It trades about -0.02 of its total potential returns per unit of risk. Astra International Tbk is currently generating about -0.01 per unit of volatility. If you would invest 535,285 in Astra International Tbk on September 4, 2024 and sell it today you would lose (45,285) from holding Astra International Tbk or give up 8.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mandom Indonesia Tbk vs. Astra International Tbk
Performance |
| Timeline |
| Mandom Indonesia Tbk |
| Astra International Tbk |
Mandom Indonesia and Astra International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mandom Indonesia and Astra International
The main advantage of trading using opposite Mandom Indonesia and Astra International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mandom Indonesia position performs unexpectedly, Astra International 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 Astra International will offset losses from the drop in Astra International's long position.| Mandom Indonesia vs. Mustika Ratu Tbk | Mandom Indonesia vs. Siantar Top Tbk | Mandom Indonesia vs. Tempo Scan Pacific | Mandom Indonesia vs. Merck Tbk |
| Astra International vs. Telkom Indonesia Tbk | Astra International vs. Bank Mandiri Persero | Astra International vs. Bank Central Asia | Astra International vs. PT Indofood Sukses |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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