Correlation Between METAIR INVTS and PT Astra

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

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

Diversification Opportunities for METAIR INVTS and PT Astra

0.2

Correlation Coefficient

METAIR INVTS  PT Astra

Modest diversification

The 3 months correlation between METAIR and ASJA is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding METAIR INVTS LTD 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 METAIR INVTS 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 METAIR INVTS LTD 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 METAIR INVTS i.e., METAIR INVTS and PT Astra go up and down completely randomly.

Pair Corralation between METAIR INVTS and PT Astra

Assuming the 90 days trading horizon METAIR INVTS LTD is expected to under-perform the PT Astra. But the stock apears to be less risky and, when comparing its historical volatility, METAIR INVTS LTD is 1.93 times less risky than PT Astra. The stock trades about -0.34 of its potential returns per unit of risk. The PT Astra International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  29.00  in PT Astra International on October 9, 2024 and sell it today you would earn a total of  2.00  from holding PT Astra International or generate 6.9% return on investment over 90 days.

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

METAIR INVTS LTD  vs.  PT Astra International

METAIR INVTS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days METAIR INVTS LTD 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 technical indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

PT Astra International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Astra International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, PT Astra may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with METAIR INVTS and PT Astra

The main advantage of trading using opposite METAIR INVTS and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METAIR INVTS 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.

The idea behind METAIR INVTS LTD and PT Astra International 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.