Correlation Between PT Astra and Pegasus Tel

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

Diversification Opportunities for PT Astra and Pegasus Tel

-0.61

Correlation Coefficient

PT Astra  Pegasus Tel

Excellent diversification

The 3 months correlation between PTAIF and Pegasus is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Pegasus Tel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Tel 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 Pegasus Tel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Tel has no effect on the direction of PT Astra i.e., PT Astra and Pegasus Tel go up and down completely randomly.

Pair Corralation between PT Astra and Pegasus Tel

Assuming the 90 days horizon PT Astra is expected to generate 15.03 times less return on investment than Pegasus Tel. But when comparing it to its historical volatility, PT Astra International is 6.27 times less risky than Pegasus Tel. It trades about 0.04 of its potential returns per unit of risk. Pegasus Tel is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.04  in Pegasus Tel on September 10, 2024 and sell it today you would earn a total of  0.09  from holding Pegasus Tel or generate 225.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	55.86%
Values	Daily Returns

PT Astra International  vs.  Pegasus Tel

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 weak forward indicators, PT Astra reported solid returns over the last few months and may actually be approaching a breakup point.

Pegasus Tel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pegasus Tel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PT Astra and Pegasus Tel

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

The idea behind PT Astra International and Pegasus Tel 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.