Correlation Between PICKN PAY and PT Astra

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

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

Diversification Opportunities for PICKN PAY and PT Astra

0.14

Correlation Coefficient

PICKN PAY  PT Astra

Average diversification

The 3 months correlation between PICKN and ASJA is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES 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 PICKN PAY 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 PICKN PAY STORES 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 PICKN PAY i.e., PICKN PAY and PT Astra go up and down completely randomly.

Pair Corralation between PICKN PAY and PT Astra

Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the PT Astra. But the stock apears to be less risky and, when comparing its historical volatility, PICKN PAY STORES is 1.35 times less risky than PT Astra. The stock trades about -0.02 of its potential returns per unit of risk. The PT Astra International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  33.00  in PT Astra International on September 14, 2024 and sell it today you would lose (3.00) from holding PT Astra International or give up 9.09% of portfolio value over 90 days.

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

PICKN PAY STORES  vs.  PT Astra International

PICKN PAY STORES

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PICKN PAY STORES are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PICKN PAY unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 January 2025.

Pair Trading with PICKN PAY and PT Astra

The main advantage of trading using opposite PICKN PAY and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY 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 PICKN PAY STORES 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.