Correlation Between Affiliated Resources and PT Astra
Can any of the company-specific risk be diversified away by investing in both Affiliated Resources 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 Affiliated Resources and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Resources Corp and PT Astra International, you can compare the effects of market volatilities on Affiliated Resources 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 Affiliated Resources with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Resources and PT Astra.
Diversification Opportunities for Affiliated Resources and PT Astra
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Affiliated and PTAIF is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Resources Corp 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 Affiliated Resources 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 Affiliated Resources Corp 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 Affiliated Resources i.e., Affiliated Resources and PT Astra go up and down completely randomly.
Pair Corralation between Affiliated Resources and PT Astra
Given the investment horizon of 90 days Affiliated Resources Corp is expected to generate 3.36 times more return on investment than PT Astra. However, Affiliated Resources is 3.36 times more volatile than PT Astra International. It trades about 0.06 of its potential returns per unit of risk. PT Astra International is currently generating about 0.06 per unit of risk. If you would invest 7.95 in Affiliated Resources Corp on December 2, 2024 and sell it today you would lose (0.46) from holding Affiliated Resources Corp or give up 5.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Affiliated Resources Corp vs. PT Astra International
Performance |
Timeline |
Affiliated Resources Corp |
PT Astra International |
Affiliated Resources and PT Astra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Affiliated Resources and PT Astra
The main advantage of trading using opposite Affiliated Resources and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Resources 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.Affiliated Resources vs. Perseus Mining Limited | Affiliated Resources vs. Delta Air Lines | Affiliated Resources vs. ioneer Ltd American | Affiliated Resources vs. Ryanair Holdings PLC |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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