Correlation Between Astra International and Oakworth Capital

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

Diversification Opportunities for Astra International and Oakworth Capital

-0.04

Correlation Coefficient

Astra International  Oakworth Capital

Good diversification

The 3 months correlation between Astra and Oakworth is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Oakworth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakworth Capital 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 Oakworth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakworth Capital has no effect on the direction of Astra International i.e., Astra International and Oakworth Capital go up and down completely randomly.

Pair Corralation between Astra International and Oakworth Capital

Assuming the 90 days horizon Astra International Tbk is expected to under-perform the Oakworth Capital. In addition to that, Astra International is 2.84 times more volatile than Oakworth Capital. It trades about -0.03 of its total potential returns per unit of risk. Oakworth Capital is currently generating about 0.03 per unit of volatility. If you would invest  3,150  in Oakworth Capital on December 21, 2024 and sell it today you would earn a total of  50.00  from holding Oakworth Capital or generate 1.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Astra International Tbk  vs.  Oakworth Capital

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

Oakworth Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oakworth Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, Oakworth Capital is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Astra International and Oakworth Capital

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

The idea behind Astra International Tbk and Oakworth Capital 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.