Correlation Between PT Astra and GMéxico Transportes

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

Diversification Opportunities for PT Astra and GMéxico Transportes

-0.44

Correlation Coefficient

PT Astra  GMéxico Transportes

Very good diversification

The 3 months correlation between PTAIF and GMéxico is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and GMxico Transportes SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMxico Transportes SAB 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 GMéxico Transportes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMxico Transportes SAB has no effect on the direction of PT Astra i.e., PT Astra and GMéxico Transportes go up and down completely randomly.

Pair Corralation between PT Astra and GMéxico Transportes

Assuming the 90 days horizon PT Astra International is expected to under-perform the GMéxico Transportes. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Astra International is 2.15 times less risky than GMéxico Transportes. The pink sheet trades about -0.18 of its potential returns per unit of risk. The GMxico Transportes SAB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  110.00  in GMxico Transportes SAB on October 25, 2024 and sell it today you would earn a total of  46.00  from holding GMxico Transportes SAB or generate 41.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

PT Astra International  vs.  GMxico Transportes SAB

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.

GMxico Transportes SAB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GMxico Transportes SAB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, GMéxico Transportes reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Astra and GMéxico Transportes

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

The idea behind PT Astra International and GMxico Transportes SAB 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.