Correlation Between TCL Electronics and PT Astra
Can any of the company-specific risk be diversified away by investing in both TCL Electronics and PT Astra 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 TCL Electronics and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TCL Electronics Holdings and PT Astra International, you can compare the effects of market volatilities on TCL Electronics and PT Astra 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 TCL Electronics with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCL Electronics and PT Astra.
Diversification Opportunities for TCL Electronics and PT Astra
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TCL and PTAIF is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding TCL Electronics Holdings and PT Astra International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Astra International and TCL Electronics 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 TCL Electronics Holdings are associated (or correlated) with PT Astra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Astra International has no effect on the direction of TCL Electronics i.e., TCL Electronics and PT Astra go up and down completely randomly.
Pair Corralation between TCL Electronics and PT Astra
Assuming the 90 days horizon TCL Electronics Holdings is expected to generate 0.8 times more return on investment than PT Astra. However, TCL Electronics Holdings is 1.26 times less risky than PT Astra. It trades about 0.06 of its potential returns per unit of risk. PT Astra International is currently generating about 0.03 per unit of risk. If you would invest 37.00 in TCL Electronics Holdings on August 27, 2024 and sell it today you would earn a total of 30.00 from holding TCL Electronics Holdings or generate 81.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.87% |
| Values | Daily Returns |
TCL Electronics Holdings vs. PT Astra International
Performance |
| Timeline |
| TCL Electronics Holdings |
| PT Astra International |
TCL Electronics and PT Astra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TCL Electronics and PT Astra
The main advantage of trading using opposite TCL Electronics and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCL Electronics position performs unexpectedly, PT Astra 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 PT Astra will offset losses from the drop in PT Astra's long position.| TCL Electronics vs. Apple Inc | TCL Electronics vs. Xiaomi Corp | TCL Electronics vs. Samsung Electronics Co | TCL Electronics vs. LG Display Co |
| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Lear Corporation | PT Astra vs. BorgWarner |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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