Correlation Between Astra International and Komatsu
Can any of the company-specific risk be diversified away by investing in both Astra International and Komatsu 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 Komatsu 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 Komatsu, you can compare the effects of market volatilities on Astra International and Komatsu 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 Komatsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Komatsu.
Diversification Opportunities for Astra International and Komatsu
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Astra and Komatsu is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Komatsu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komatsu 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 Komatsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komatsu has no effect on the direction of Astra International i.e., Astra International and Komatsu go up and down completely randomly.
Pair Corralation between Astra International and Komatsu
Assuming the 90 days horizon Astra International is expected to generate 16.15 times less return on investment than Komatsu. But when comparing it to its historical volatility, Astra International Tbk is 1.11 times less risky than Komatsu. It trades about 0.01 of its potential returns per unit of risk. Komatsu is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,750 in Komatsu on December 28, 2024 and sell it today you would earn a total of 311.00 from holding Komatsu or generate 11.31% 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. Komatsu
Performance |
Timeline |
Astra International Tbk |
Komatsu |
Astra International and Komatsu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Astra International and Komatsu
The main advantage of trading using opposite Astra International and Komatsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Komatsu 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 Komatsu will offset losses from the drop in Komatsu's long position.Astra International vs. Motorcar Parts of | Astra International vs. ECARX Holdings Class | Astra International vs. Fox Factory Holding | Astra International vs. Commercial Vehicle Group |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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