Correlation Between PT Astra and Forbion European

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

Diversification Opportunities for PT Astra and Forbion European

-0.77

Correlation Coefficient

PT Astra  Forbion European

Pay attention - limited upside

The 3 months correlation between PTAIF and Forbion is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Forbion European Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forbion European Acq 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 Forbion European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forbion European Acq has no effect on the direction of PT Astra i.e., PT Astra and Forbion European go up and down completely randomly.

Pair Corralation between PT Astra and Forbion European

If you would invest  49.00  in Forbion European Acquisition on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Forbion European Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.56%
Values	Daily Returns

PT Astra International  vs.  Forbion European Acquisition

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 weak 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.

Forbion European Acq

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PT Astra and Forbion European

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

The idea behind PT Astra International and Forbion European Acquisition 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.