Correlation Between Astra International and HPX Corp

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

Diversification Opportunities for Astra International and HPX Corp

-0.38

Correlation Coefficient

Astra International  HPX Corp

Very good diversification

The 3 months correlation between Astra and HPX is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and HPX Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HPX Corp 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 HPX Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HPX Corp has no effect on the direction of Astra International i.e., Astra International and HPX Corp go up and down completely randomly.

Pair Corralation between Astra International and HPX Corp

Assuming the 90 days horizon Astra International is expected to generate 101.16 times less return on investment than HPX Corp. But when comparing it to its historical volatility, Astra International Tbk is 16.36 times less risky than HPX Corp. It trades about 0.02 of its potential returns per unit of risk. HPX Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  990.00  in HPX Corp on September 26, 2024 and sell it today you would earn a total of  735.00  from holding HPX Corp or generate 74.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	8.47%
Values	Daily Returns

Astra International Tbk  vs.  HPX Corp

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 abnormal 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.

HPX Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Astra International and HPX Corp

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

The idea behind Astra International Tbk and HPX Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.