Correlation Between Affiliated Resources and Astra International

Can any of the company-specific risk be diversified away by investing in both Affiliated Resources and Astra International 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 Astra International 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 Astra International Tbk, you can compare the effects of market volatilities on Affiliated Resources and Astra International 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 Astra International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Resources and Astra International.

Diversification Opportunities for Affiliated Resources and Astra International

0.53

Correlation Coefficient

Affiliated Resources  Astra International

Very weak diversification

The 3 months correlation between Affiliated and Astra is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Resources Corp and Astra International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra International Tbk 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 Astra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra International Tbk has no effect on the direction of Affiliated Resources i.e., Affiliated Resources and Astra International go up and down completely randomly.

Pair Corralation between Affiliated Resources and Astra International

Given the investment horizon of 90 days Affiliated Resources Corp is expected to under-perform the Astra International. In addition to that, Affiliated Resources is 2.92 times more volatile than Astra International Tbk. It trades about -0.01 of its total potential returns per unit of risk. Astra International Tbk is currently generating about 0.0 per unit of volatility. If you would invest  646.00  in Astra International Tbk on September 16, 2024 and sell it today you would lose (10.00) from holding Astra International Tbk or give up 1.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.48%
Values	Daily Returns

Affiliated Resources Corp  vs.  Astra International Tbk

Affiliated Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Affiliated Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Affiliated Resources is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Astra International Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astra International Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Astra International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Affiliated Resources and Astra International

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

The idea behind Affiliated Resources Corp and Astra International Tbk 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.