Correlation Between PT Astra and Yokogawa Electric

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

Diversification Opportunities for PT Astra and Yokogawa Electric

0.01

Correlation Coefficient

PT Astra  Yokogawa Electric

Significant diversification

The 3 months correlation between PTAIF and Yokogawa is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Yokogawa Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokogawa Electric 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 Yokogawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokogawa Electric Corp has no effect on the direction of PT Astra i.e., PT Astra and Yokogawa Electric go up and down completely randomly.

Pair Corralation between PT Astra and Yokogawa Electric

Assuming the 90 days horizon PT Astra International is expected to generate 1.66 times more return on investment than Yokogawa Electric. However, PT Astra is 1.66 times more volatile than Yokogawa Electric Corp. It trades about 0.0 of its potential returns per unit of risk. Yokogawa Electric Corp is currently generating about -0.14 per unit of risk. If you would invest  30.00  in PT Astra International on November 27, 2024 and sell it today you would lose (1.00) from holding PT Astra International or give up 3.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	75.0%
Values	Daily Returns

PT Astra International  vs.  Yokogawa Electric 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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Yokogawa Electric Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yokogawa Electric Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PT Astra and Yokogawa Electric

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

The idea behind PT Astra International and Yokogawa Electric 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.