Correlation Between MTY Food and PT Astra

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

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

Diversification Opportunities for MTY Food and PT Astra

0.38

Correlation Coefficient

MTY Food  PT Astra

Weak diversification

The 3 months correlation between MTY and ASJA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group 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 MTY Food 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 MTY Food Group 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 MTY Food i.e., MTY Food and PT Astra go up and down completely randomly.

Pair Corralation between MTY Food and PT Astra

Assuming the 90 days horizon MTY Food Group is expected to under-perform the PT Astra. But the stock apears to be less risky and, when comparing its historical volatility, MTY Food Group is 2.02 times less risky than PT Astra. The stock trades about -0.07 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  29.00  in PT Astra International on December 19, 2024 and sell it today you would lose (2.00) from holding PT Astra International or give up 6.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

MTY Food Group  vs.  PT Astra International

MTY Food Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days MTY Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains 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 MTY Food and PT Astra

The main advantage of trading using opposite MTY Food and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food 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 MTY Food Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.