Correlation Between PT Astra and ProConcept Marketing

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

Diversification Opportunities for PT Astra and ProConcept Marketing

-0.56

Correlation Coefficient

PT Astra  ProConcept Marketing

Excellent diversification

The 3 months correlation between PTAIF and ProConcept is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and ProConcept Marketing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProConcept Marketing 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 ProConcept Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProConcept Marketing has no effect on the direction of PT Astra i.e., PT Astra and ProConcept Marketing go up and down completely randomly.

Pair Corralation between PT Astra and ProConcept Marketing

Assuming the 90 days horizon PT Astra is expected to generate 1.1 times less return on investment than ProConcept Marketing. But when comparing it to its historical volatility, PT Astra International is 12.29 times less risky than ProConcept Marketing. It trades about 0.16 of its potential returns per unit of risk. ProConcept Marketing Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  15.00  in ProConcept Marketing Group on September 13, 2024 and sell it today you would lose (8.77) from holding ProConcept Marketing Group or give up 58.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

PT Astra International  vs.  ProConcept Marketing Group

PT Astra International

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Astra International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, PT Astra reported solid returns over the last few months and may actually be approaching a breakup point.

ProConcept Marketing

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ProConcept Marketing Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, ProConcept Marketing displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Astra and ProConcept Marketing

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

The idea behind PT Astra International and ProConcept Marketing Group 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.