Correlation Between Astra International and Origin Energy

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

Diversification Opportunities for Astra International and Origin Energy

-0.49

Correlation Coefficient

Astra International  Origin Energy

Very good diversification

The 3 months correlation between Astra and Origin is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Origin Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy 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 Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy has no effect on the direction of Astra International i.e., Astra International and Origin Energy go up and down completely randomly.

Pair Corralation between Astra International and Origin Energy

Assuming the 90 days horizon Astra International is expected to generate 1.62 times less return on investment than Origin Energy. In addition to that, Astra International is 1.45 times more volatile than Origin Energy Ltd. It trades about 0.02 of its total potential returns per unit of risk. Origin Energy Ltd is currently generating about 0.05 per unit of volatility. If you would invest  625.00  in Origin Energy Ltd on September 12, 2024 and sell it today you would earn a total of  25.00  from holding Origin Energy Ltd or generate 4.0% 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.  Origin Energy Ltd

Astra International Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astra International Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Origin Energy

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Energy Ltd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Origin Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astra International and Origin Energy

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

The idea behind Astra International Tbk and Origin Energy Ltd 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.