Correlation Between Astra International and Oregon Pacific

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

Diversification Opportunities for Astra International and Oregon Pacific

-0.65

Correlation Coefficient

Astra International  Oregon Pacific

Excellent diversification

The 3 months correlation between Astra and Oregon is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Oregon Pacific Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oregon Pacific Bancorp 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 Oregon Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oregon Pacific Bancorp has no effect on the direction of Astra International i.e., Astra International and Oregon Pacific go up and down completely randomly.

Pair Corralation between Astra International and Oregon Pacific

Assuming the 90 days horizon Astra International is expected to generate 1.06 times less return on investment than Oregon Pacific. In addition to that, Astra International is 2.79 times more volatile than Oregon Pacific Bancorp. It trades about 0.01 of its total potential returns per unit of risk. Oregon Pacific Bancorp is currently generating about 0.02 per unit of volatility. If you would invest  800.00  in Oregon Pacific Bancorp on December 28, 2024 and sell it today you would earn a total of  5.00  from holding Oregon Pacific Bancorp or generate 0.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Astra International Tbk  vs.  Oregon Pacific Bancorp

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

Oregon Pacific Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oregon Pacific Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Oregon Pacific 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 Oregon Pacific

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

The idea behind Astra International Tbk and Oregon Pacific Bancorp 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.