Correlation Between PT Astra and Hallmark Financial

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

Diversification Opportunities for PT Astra and Hallmark Financial

0.0

Correlation Coefficient

PT Astra  Hallmark Financial

Pay attention - limited upside

The 3 months correlation between PTAIF and Hallmark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Hallmark Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hallmark Financial 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 Hallmark Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hallmark Financial has no effect on the direction of PT Astra i.e., PT Astra and Hallmark Financial go up and down completely randomly.

Pair Corralation between PT Astra and Hallmark Financial

If you would invest  30.00  in PT Astra International on December 20, 2024 and sell it today you would lose (1.00) from holding PT Astra International or give up 3.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PT Astra International  vs.  Hallmark Financial Services

PT Astra International

Risk-Adjusted Performance

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 nearly stable forward indicators, PT Astra is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Hallmark Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hallmark Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Hallmark Financial is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with PT Astra and Hallmark Financial

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

The idea behind PT Astra International and Hallmark Financial Services 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.