Correlation Between Astra International and ATAK Old

Can any of the company-specific risk be diversified away by investing in both Astra International and ATAK 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 Astra International and ATAK Old into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astra International Tbk and ATAK Old, you can compare the effects of market volatilities on Astra International and ATAK 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 Astra International with a short position of ATAK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and ATAK Old.

Diversification Opportunities for Astra International and ATAK Old

-0.6

Correlation Coefficient

Astra International  ATAK Old

Excellent diversification

The 3 months correlation between Astra and ATAK is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and ATAK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATAK Old and Astra International 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 Astra International Tbk are associated (or correlated) with ATAK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATAK Old has no effect on the direction of Astra International i.e., Astra International and ATAK Old go up and down completely randomly.

Pair Corralation between Astra International and ATAK Old

Assuming the 90 days horizon Astra International is expected to generate 12.33 times less return on investment than ATAK Old. In addition to that, Astra International is 5.25 times more volatile than ATAK Old. It trades about 0.0 of its total potential returns per unit of risk. ATAK Old is currently generating about 0.12 per unit of volatility. If you would invest  1,025  in ATAK Old on October 11, 2024 and sell it today you would earn a total of  49.00  from holding ATAK Old or generate 4.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	25.86%
Values	Daily Returns

Astra International Tbk  vs.  ATAK Old

Astra International Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astra International Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Astra International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

ATAK Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATAK Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, ATAK 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 Astra International and ATAK Old

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

The idea behind Astra International Tbk and ATAK 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.