Correlation Between PT Astra and VARIOUS EATERIES

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

By analyzing existing cross correlation between PT Astra International and VARIOUS EATERIES LS, you can compare the effects of market volatilities on PT Astra and VARIOUS EATERIES 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 PT Astra with a short position of VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and VARIOUS EATERIES.

Diversification Opportunities for PT Astra and VARIOUS EATERIES

0.35

Correlation Coefficient

PT Astra  VARIOUS EATERIES

Weak diversification

The 3 months correlation between ASJA and VARIOUS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES and PT Astra 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 PT Astra International are associated (or correlated) with VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of PT Astra i.e., PT Astra and VARIOUS EATERIES go up and down completely randomly.

Pair Corralation between PT Astra and VARIOUS EATERIES

Assuming the 90 days trading horizon PT Astra International is expected to generate 0.93 times more return on investment than VARIOUS EATERIES. However, PT Astra International is 1.07 times less risky than VARIOUS EATERIES. It trades about 0.01 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about -0.17 per unit of risk. If you would invest  30.00  in PT Astra International on December 4, 2024 and sell it today you would lose (1.00) from holding PT Astra International or give up 3.33% of portfolio value over 90 days.

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

PT Astra International  vs.  VARIOUS EATERIES LS

PT Astra International

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Astra International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking indicators, PT Astra is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

VARIOUS EATERIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days VARIOUS EATERIES LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PT Astra and VARIOUS EATERIES

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

The idea behind PT Astra International and VARIOUS EATERIES LS 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.