Correlation Between Astra International and Avidbank Holdings

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

Diversification Opportunities for Astra International and Avidbank Holdings

-0.57

Correlation Coefficient

Astra International  Avidbank Holdings

Excellent diversification

The 3 months correlation between Astra and Avidbank is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Avidbank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avidbank Holdings 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 Avidbank Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avidbank Holdings has no effect on the direction of Astra International i.e., Astra International and Avidbank Holdings go up and down completely randomly.

Pair Corralation between Astra International and Avidbank Holdings

Assuming the 90 days horizon Astra International is expected to generate 3.68 times less return on investment than Avidbank Holdings. In addition to that, Astra International is 3.55 times more volatile than Avidbank Holdings. It trades about 0.02 of its total potential returns per unit of risk. Avidbank Holdings is currently generating about 0.27 per unit of volatility. If you would invest  1,965  in Avidbank Holdings on September 12, 2024 and sell it today you would earn a total of  217.00  from holding Avidbank Holdings or generate 11.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Astra International Tbk  vs.  Avidbank Holdings

Astra International Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astra International Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Astra International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Avidbank Holdings

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Avidbank Holdings are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental drivers, Avidbank Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Astra International and Avidbank Holdings

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

The idea behind Astra International Tbk and Avidbank Holdings 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.