Correlation Between PT Astra and Captiva Verde
Can any of the company-specific risk be diversified away by investing in both PT Astra and Captiva Verde 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 Captiva Verde 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 Captiva Verde Land, you can compare the effects of market volatilities on PT Astra and Captiva Verde 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 Captiva Verde. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Captiva Verde.
Diversification Opportunities for PT Astra and Captiva Verde
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between PTAIF and Captiva is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Captiva Verde Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Captiva Verde Land 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 Captiva Verde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Captiva Verde Land has no effect on the direction of PT Astra i.e., PT Astra and Captiva Verde go up and down completely randomly.
Pair Corralation between PT Astra and Captiva Verde
Assuming the 90 days horizon PT Astra is expected to generate 37.08 times less return on investment than Captiva Verde. But when comparing it to its historical volatility, PT Astra International is 7.16 times less risky than Captiva Verde. It trades about 0.03 of its potential returns per unit of risk. Captiva Verde Land is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Captiva Verde Land on December 28, 2024 and sell it today you would earn a total of 1.50 from holding Captiva Verde Land or generate 150.0% 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. Captiva Verde Land
Performance |
Timeline |
PT Astra International |
Captiva Verde Land |
PT Astra and Captiva Verde Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Astra and Captiva Verde
The main advantage of trading using opposite PT Astra and Captiva Verde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Captiva Verde 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 Captiva Verde will offset losses from the drop in Captiva Verde's long position.PT Astra vs. Motorcar Parts of | PT Astra vs. ECARX Holdings Class | PT Astra vs. Fox Factory Holding | PT Astra vs. Commercial Vehicle Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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