Correlation Between VARIOUS EATERIES and PT Astra

Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES 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 VARIOUS EATERIES and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VARIOUS EATERIES LS and PT Astra International, you can compare the effects of market volatilities on VARIOUS EATERIES 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 VARIOUS EATERIES with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and PT Astra.

Diversification Opportunities for VARIOUS EATERIES and PT Astra

0.63

Correlation Coefficient

VARIOUS EATERIES  PT Astra

Poor diversification

The 3 months correlation between VARIOUS and ASJA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS 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 VARIOUS EATERIES 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 VARIOUS EATERIES LS 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 VARIOUS EATERIES i.e., VARIOUS EATERIES and PT Astra go up and down completely randomly.

Pair Corralation between VARIOUS EATERIES and PT Astra

Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the PT Astra. But the stock apears to be less risky and, when comparing its historical volatility, VARIOUS EATERIES LS is 1.13 times less risky than PT Astra. The stock trades about -0.11 of its potential returns per unit of risk. The PT Astra International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  30.00  in PT Astra International on December 26, 2024 and sell it today you would lose (2.00) from holding PT Astra International or give up 6.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

VARIOUS EATERIES LS  vs.  PT Astra International

VARIOUS EATERIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days VARIOUS EATERIES LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

PT Astra International

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Astra International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, PT Astra is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VARIOUS EATERIES and PT Astra

The main advantage of trading using opposite VARIOUS EATERIES and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES 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.

The idea behind VARIOUS EATERIES LS and PT Astra International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.