Correlation Between Astra International and CCFNB Bancorp

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

Diversification Opportunities for Astra International and CCFNB Bancorp

0.03

Correlation Coefficient

Astra International  CCFNB Bancorp

Significant diversification

The 3 months correlation between Astra and CCFNB is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp 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 CCFNB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCFNB Bancorp has no effect on the direction of Astra International i.e., Astra International and CCFNB Bancorp go up and down completely randomly.

Pair Corralation between Astra International and CCFNB Bancorp

Assuming the 90 days horizon Astra International is expected to generate 3.08 times less return on investment than CCFNB Bancorp. In addition to that, Astra International is 1.4 times more volatile than CCFNB Bancorp. It trades about 0.01 of its total potential returns per unit of risk. CCFNB Bancorp is currently generating about 0.02 per unit of volatility. If you would invest  4,086  in CCFNB Bancorp on December 28, 2024 and sell it today you would earn a total of  64.00  from holding CCFNB Bancorp or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Astra International Tbk  vs.  CCFNB Bancorp

Astra International Tbk

Risk-Adjusted Performance

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 current stock price disturbance, may contribute to short-term losses for the investors.

CCFNB Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CCFNB Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, CCFNB Bancorp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Astra International and CCFNB Bancorp

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

The idea behind Astra International Tbk and CCFNB Bancorp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.