Correlation Between Trans Power and Astra Graphia
Can any of the company-specific risk be diversified away by investing in both Trans Power and Astra Graphia 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 Trans Power and Astra Graphia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trans Power Marine and Astra Graphia Tbk, you can compare the effects of market volatilities on Trans Power and Astra Graphia 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 Trans Power with a short position of Astra Graphia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trans Power and Astra Graphia.
Diversification Opportunities for Trans Power and Astra Graphia
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Trans and Astra is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Trans Power Marine and Astra Graphia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Graphia Tbk and Trans Power 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 Trans Power Marine are associated (or correlated) with Astra Graphia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Graphia Tbk has no effect on the direction of Trans Power i.e., Trans Power and Astra Graphia go up and down completely randomly.
Pair Corralation between Trans Power and Astra Graphia
Assuming the 90 days trading horizon Trans Power Marine is expected to under-perform the Astra Graphia. But the stock apears to be less risky and, when comparing its historical volatility, Trans Power Marine is 1.03 times less risky than Astra Graphia. The stock trades about -0.53 of its potential returns per unit of risk. The Astra Graphia Tbk is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 89,000 in Astra Graphia Tbk on September 2, 2024 and sell it today you would lose (4,000) from holding Astra Graphia Tbk or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trans Power Marine vs. Astra Graphia Tbk
Performance |
| Timeline |
| Trans Power Marine |
| Astra Graphia Tbk |
Trans Power and Astra Graphia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trans Power and Astra Graphia
The main advantage of trading using opposite Trans Power and Astra Graphia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trans Power position performs unexpectedly, Astra Graphia 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 Graphia will offset losses from the drop in Astra Graphia's long position.| Trans Power vs. Pelayaran Nelly Dwi | Trans Power vs. Wintermar Offshore Marine | Trans Power vs. Pelita Samudera Shipping | Trans Power vs. Samudera Indonesia Tbk |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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