Correlation Between PT Astra and EMLDW Old

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

Diversification Opportunities for PT Astra and EMLDW Old

-0.56

Correlation Coefficient

PT Astra  EMLDW Old

Excellent diversification

The 3 months correlation between PTAIF and EMLDW is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and EMLDW Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMLDW Old 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 EMLDW Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMLDW Old has no effect on the direction of PT Astra i.e., PT Astra and EMLDW Old go up and down completely randomly.

Pair Corralation between PT Astra and EMLDW Old

If you would invest (100.00) in EMLDW Old on October 10, 2024 and sell it today you would earn a total of  100.00  from holding EMLDW Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

PT Astra International  vs.  EMLDW Old

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.

EMLDW Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EMLDW Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, EMLDW Old is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with PT Astra and EMLDW Old

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

The idea behind PT Astra International and EMLDW Old 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.