Correlation Between Astra International and Zedcor

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

Diversification Opportunities for Astra International and Zedcor

-0.67

Correlation Coefficient

Astra International  Zedcor

Excellent diversification

The 3 months correlation between Astra and Zedcor is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Zedcor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedcor Inc 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 Zedcor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedcor Inc has no effect on the direction of Astra International i.e., Astra International and Zedcor go up and down completely randomly.

Pair Corralation between Astra International and Zedcor

Assuming the 90 days horizon Astra International is expected to generate 65.3 times less return on investment than Zedcor. But when comparing it to its historical volatility, Astra International Tbk is 1.97 times less risky than Zedcor. It trades about 0.0 of its potential returns per unit of risk. Zedcor Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  51.00  in Zedcor Inc on October 5, 2024 and sell it today you would earn a total of  191.00  from holding Zedcor Inc or generate 374.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.56%
Values	Daily Returns

Astra International Tbk  vs.  Zedcor Inc

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 latest unfluctuating performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Zedcor Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zedcor Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Zedcor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astra International and Zedcor

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

The idea behind Astra International Tbk and Zedcor Inc 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.