Correlation Between PT Astra and TENK Old

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

Diversification Opportunities for PT Astra and TENK Old

-0.73

Correlation Coefficient

PT Astra  TENK Old

Pay attention - limited upside

The 3 months correlation between PTAIF and TENK is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and TENK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TENK 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 TENK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TENK Old has no effect on the direction of PT Astra i.e., PT Astra and TENK Old go up and down completely randomly.

Pair Corralation between PT Astra and TENK Old

Assuming the 90 days horizon PT Astra International is expected to under-perform the TENK Old. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Astra International is 2.36 times less risky than TENK Old. The pink sheet trades about 0.0 of its potential returns per unit of risk. The TENK Old is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,027  in TENK Old on October 10, 2024 and sell it today you would lose (707.00) from holding TENK Old or give up 68.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	78.55%
Values	Daily Returns

PT Astra International  vs.  TENK Old

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

TENK Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PT Astra and TENK Old

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

The idea behind PT Astra International and TENK 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.