Correlation Between PT Astra and Arlington Asset
Can any of the company-specific risk be diversified away by investing in both PT Astra and Arlington Asset 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 Arlington Asset 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 Arlington Asset Investment, you can compare the effects of market volatilities on PT Astra and Arlington Asset 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 Arlington Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Arlington Asset.
Diversification Opportunities for PT Astra and Arlington Asset
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PTAIF and Arlington is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Arlington Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arlington Asset Inve 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 Arlington Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arlington Asset Inve has no effect on the direction of PT Astra i.e., PT Astra and Arlington Asset go up and down completely randomly.
Pair Corralation between PT Astra and Arlington Asset
Assuming the 90 days horizon PT Astra is expected to generate 23.24 times less return on investment than Arlington Asset. But when comparing it to its historical volatility, PT Astra International is 1.54 times less risky than Arlington Asset. It trades about 0.01 of its potential returns per unit of risk. Arlington Asset Investment is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 263.00 in Arlington Asset Investment on September 11, 2024 and sell it today you would earn a total of 206.00 from holding Arlington Asset Investment or generate 78.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 28.33% |
Values | Daily Returns |
PT Astra International vs. Arlington Asset Investment
Performance |
Timeline |
PT Astra International |
Arlington Asset Inve |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Astra and Arlington Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Astra and Arlington Asset
The main advantage of trading using opposite PT Astra and Arlington Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Arlington Asset 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 Arlington Asset will offset losses from the drop in Arlington Asset's long position.PT Astra vs. IONQ Inc | PT Astra vs. Sprouts Farmers Market | PT Astra vs. Austin Gold Corp | PT Astra vs. Zscaler |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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