Correlation Between Astra International and Buyung Poetra
Can any of the company-specific risk be diversified away by investing in both Astra International and Buyung Poetra 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 International and Buyung Poetra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra International Tbk and Buyung Poetra Sembada, you can compare the effects of market volatilities on Astra International and Buyung Poetra 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 International with a short position of Buyung Poetra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Buyung Poetra.
Diversification Opportunities for Astra International and Buyung Poetra
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Astra and Buyung is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Buyung Poetra Sembada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buyung Poetra Sembada and Astra International 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 International Tbk are associated (or correlated) with Buyung Poetra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buyung Poetra Sembada has no effect on the direction of Astra International i.e., Astra International and Buyung Poetra go up and down completely randomly.
Pair Corralation between Astra International and Buyung Poetra
Assuming the 90 days trading horizon Astra International Tbk is expected to generate 0.59 times more return on investment than Buyung Poetra. However, Astra International Tbk is 1.7 times less risky than Buyung Poetra. It trades about 0.01 of its potential returns per unit of risk. Buyung Poetra Sembada is currently generating about -0.2 per unit of risk. If you would invest 490,000 in Astra International Tbk on December 30, 2024 and sell it today you would earn a total of 2,000 from holding Astra International Tbk or generate 0.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Astra International Tbk vs. Buyung Poetra Sembada
Performance |
Timeline |
Astra International Tbk |
Buyung Poetra Sembada |
Astra International and Buyung Poetra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Astra International and Buyung Poetra
The main advantage of trading using opposite Astra International and Buyung Poetra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Buyung Poetra 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 Buyung Poetra will offset losses from the drop in Buyung Poetra's long position.Astra International vs. Telkom Indonesia Tbk | Astra International vs. Bank Mandiri Persero | Astra International vs. Bank Central Asia | Astra International vs. PT Indofood Sukses |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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