Correlation Between PT Astra and Wanderport Corp

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

Diversification Opportunities for PT Astra and Wanderport Corp

0.19

Correlation Coefficient

PT Astra  Wanderport Corp

Average diversification

The 3 months correlation between PTAIF and Wanderport is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Wanderport Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wanderport Corp 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 Wanderport Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wanderport Corp has no effect on the direction of PT Astra i.e., PT Astra and Wanderport Corp go up and down completely randomly.

Pair Corralation between PT Astra and Wanderport Corp

Assuming the 90 days horizon PT Astra International is expected to under-perform the Wanderport Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Astra International is 1.54 times less risky than Wanderport Corp. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Wanderport Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  0.08  in Wanderport Corp on November 28, 2024 and sell it today you would earn a total of  0.02  from holding Wanderport Corp or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

PT Astra International  vs.  Wanderport Corp

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

Wanderport Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wanderport Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Wanderport Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Astra and Wanderport Corp

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

The idea behind PT Astra International and Wanderport Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.