Correlation Between PT Astra and American Virtual

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

Diversification Opportunities for PT Astra and American Virtual

0.26

Correlation Coefficient

PT Astra  American Virtual

Modest diversification

The 3 months correlation between PTAIF and American is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and American Virtual Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Virtual Cloud 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 American Virtual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Virtual Cloud has no effect on the direction of PT Astra i.e., PT Astra and American Virtual go up and down completely randomly.

Pair Corralation between PT Astra and American Virtual

If you would invest  0.60  in American Virtual Cloud on October 21, 2024 and sell it today you would earn a total of  0.00  from holding American Virtual Cloud or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.61%
Values	Daily Returns

PT Astra International  vs.  American Virtual Cloud

PT Astra International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Astra International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward 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.

American Virtual Cloud

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Virtual Cloud has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, American Virtual is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PT Astra and American Virtual

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

The idea behind PT Astra International and American Virtual Cloud 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.