Correlation Between Akasha Wira and Austindo Nusantara

Can any of the company-specific risk be diversified away by investing in both Akasha Wira and Austindo Nusantara 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 Akasha Wira and Austindo Nusantara into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akasha Wira International and Austindo Nusantara Jaya, you can compare the effects of market volatilities on Akasha Wira and Austindo Nusantara 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 Akasha Wira with a short position of Austindo Nusantara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akasha Wira and Austindo Nusantara.

Diversification Opportunities for Akasha Wira and Austindo Nusantara

0.01

Correlation Coefficient

Akasha Wira  Austindo Nusantara

Significant diversification

The 3 months correlation between Akasha and Austindo is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Akasha Wira International and Austindo Nusantara Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austindo Nusantara Jaya and Akasha Wira 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 Akasha Wira International are associated (or correlated) with Austindo Nusantara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austindo Nusantara Jaya has no effect on the direction of Akasha Wira i.e., Akasha Wira and Austindo Nusantara go up and down completely randomly.

Pair Corralation between Akasha Wira and Austindo Nusantara

Assuming the 90 days trading horizon Akasha Wira International is expected to under-perform the Austindo Nusantara. In addition to that, Akasha Wira is 1.85 times more volatile than Austindo Nusantara Jaya. It trades about -0.04 of its total potential returns per unit of risk. Austindo Nusantara Jaya is currently generating about 0.1 per unit of volatility. If you would invest  69,500  in Austindo Nusantara Jaya on September 13, 2024 and sell it today you would earn a total of  4,500  from holding Austindo Nusantara Jaya or generate 6.47% return on investment over 90 days.

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

Akasha Wira International  vs.  Austindo Nusantara Jaya

Akasha Wira International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akasha Wira International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Akasha Wira is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Austindo Nusantara Jaya

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Austindo Nusantara Jaya are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Austindo Nusantara may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Akasha Wira and Austindo Nusantara

The main advantage of trading using opposite Akasha Wira and Austindo Nusantara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akasha Wira position performs unexpectedly, Austindo Nusantara 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 Austindo Nusantara will offset losses from the drop in Austindo Nusantara's long position.

The idea behind Akasha Wira International and Austindo Nusantara Jaya 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.