Correlation Between Astra Graphia and Akr Corporindo

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

By analyzing existing cross correlation between Astra Graphia Tbk and Akr Corporindo Tbk, you can compare the effects of market volatilities on Astra Graphia and Akr Corporindo 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 Astra Graphia with a short position of Akr Corporindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Graphia and Akr Corporindo.

Diversification Opportunities for Astra Graphia and Akr Corporindo

-0.09

Correlation Coefficient

Astra Graphia  Akr Corporindo

Good diversification

The 3 months correlation between Astra and Akr is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Astra Graphia Tbk and Akr Corporindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akr Corporindo Tbk and Astra Graphia 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 Astra Graphia Tbk are associated (or correlated) with Akr Corporindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akr Corporindo Tbk has no effect on the direction of Astra Graphia i.e., Astra Graphia and Akr Corporindo go up and down completely randomly.

Pair Corralation between Astra Graphia and Akr Corporindo

Assuming the 90 days trading horizon Astra Graphia Tbk is expected to under-perform the Akr Corporindo. But the stock apears to be less risky and, when comparing its historical volatility, Astra Graphia Tbk is 2.46 times less risky than Akr Corporindo. The stock trades about -0.06 of its potential returns per unit of risk. The Akr Corporindo Tbk is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  112,000  in Akr Corporindo Tbk on December 29, 2024 and sell it today you would lose (2,500) from holding Akr Corporindo Tbk or give up 2.23% of portfolio value over 90 days.

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

Astra Graphia Tbk  vs.  Akr Corporindo Tbk

Astra Graphia Tbk

Risk-Adjusted Performance

Very Weak

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

Akr Corporindo Tbk

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Astra Graphia and Akr Corporindo

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

The idea behind Astra Graphia Tbk and Akr Corporindo 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.