Correlation Between PT Astra and IFIN Old

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

Diversification Opportunities for PT Astra and IFIN Old

0.0

Correlation Coefficient

PT Astra  IFIN Old

Pay attention - limited upside

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

Pair Corralation between PT Astra and IFIN Old

If you would invest  30.00  in PT Astra International on December 19, 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.  IFIN Old

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

IFIN Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days IFIN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, IFIN Old is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PT Astra and IFIN Old

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

The idea behind PT Astra International and IFIN 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.