Correlation Between PT Astra and Atlas Engineered

Can any of the company-specific risk be diversified away by investing in both PT Astra and Atlas Engineered 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 Atlas Engineered 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 Atlas Engineered Products, you can compare the effects of market volatilities on PT Astra and Atlas Engineered 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 Atlas Engineered. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Atlas Engineered.

Diversification Opportunities for PT Astra and Atlas Engineered

-0.3

Correlation Coefficient

PT Astra  Atlas Engineered

Very good diversification

The 3 months correlation between PTAIF and Atlas is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Atlas Engineered Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Engineered Products 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 Atlas Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Engineered Products has no effect on the direction of PT Astra i.e., PT Astra and Atlas Engineered go up and down completely randomly.

Pair Corralation between PT Astra and Atlas Engineered

Assuming the 90 days horizon PT Astra International is expected to generate 1.34 times more return on investment than Atlas Engineered. However, PT Astra is 1.34 times more volatile than Atlas Engineered Products. It trades about 0.03 of its potential returns per unit of risk. Atlas Engineered Products is currently generating about -0.2 per unit of risk. If you would invest  27.00  in PT Astra International on December 28, 2024 and sell it today you would earn a total of  1.00  from holding PT Astra International or generate 3.7% return on investment over 90 days.

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

PT Astra International  vs.  Atlas Engineered Products

PT Astra International

Risk-Adjusted Performance

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 weak forward indicators, PT Astra may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Atlas Engineered Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atlas Engineered Products has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 Atlas Engineered

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

The idea behind PT Astra International and Atlas Engineered Products 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.