Correlation Between PT Astra and HPX Corp

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

Diversification Opportunities for PT Astra and HPX Corp

-0.4

Correlation Coefficient

PT Astra  HPX Corp

Very good diversification

The 3 months correlation between PTAIF and HPX is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and HPX Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HPX Corp 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 HPX Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HPX Corp has no effect on the direction of PT Astra i.e., PT Astra and HPX Corp go up and down completely randomly.

Pair Corralation between PT Astra and HPX Corp

Assuming the 90 days horizon PT Astra is expected to generate 18.81 times less return on investment than HPX Corp. But when comparing it to its historical volatility, PT Astra International is 4.1 times less risky than HPX Corp. It trades about 0.03 of its potential returns per unit of risk. HPX Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  990.00  in HPX Corp on September 26, 2024 and sell it today you would earn a total of  735.00  from holding HPX Corp or generate 74.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	13.29%
Values	Daily Returns

PT Astra International  vs.  HPX Corp

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 abnormal performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

HPX Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HPX Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, HPX Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PT Astra and HPX Corp

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

The idea behind PT Astra International and HPX Corp 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.