Correlation Between Astra International and Quebec Precious

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

Diversification Opportunities for Astra International and Quebec Precious

-0.27

Correlation Coefficient

Astra International  Quebec Precious

Very good diversification

The 3 months correlation between Astra and Quebec is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Quebec Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebec Precious Metals 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 Quebec Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quebec Precious Metals has no effect on the direction of Astra International i.e., Astra International and Quebec Precious go up and down completely randomly.

Pair Corralation between Astra International and Quebec Precious

Assuming the 90 days horizon Astra International Tbk is expected to under-perform the Quebec Precious. But the pink sheet apears to be less risky and, when comparing its historical volatility, Astra International Tbk is 6.91 times less risky than Quebec Precious. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Quebec Precious Metals is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Quebec Precious Metals on December 29, 2024 and sell it today you would earn a total of  2.00  from holding Quebec Precious Metals or generate 200.0% return on investment over 90 days.

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

Astra International Tbk  vs.  Quebec Precious Metals

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.

Quebec Precious Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quebec Precious Metals are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Quebec Precious reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astra International and Quebec Precious

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

The idea behind Astra International Tbk and Quebec Precious Metals 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.