Correlation Between PT Astra and Unit

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

Diversification Opportunities for PT Astra and Unit

-0.22

Correlation Coefficient

PT Astra  Unit

Very good diversification

The 3 months correlation between PTAIF and Unit is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Unit Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unit 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 Unit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unit has no effect on the direction of PT Astra i.e., PT Astra and Unit go up and down completely randomly.

Pair Corralation between PT Astra and Unit

If you would invest  30.00  in Unit Corporation on September 2, 2024 and sell it today you would earn a total of  15.00  from holding Unit Corporation or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

PT Astra International  vs.  Unit Corp.

PT Astra International

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PT Astra International are ranked lower than 16 (%) 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.

Unit

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unit Corporation are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Unit showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Astra and Unit

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

The idea behind PT Astra International and Unit Corporation 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.