Correlation Between Astra International and QNB Corp

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

Diversification Opportunities for Astra International and QNB Corp

-0.51

Correlation Coefficient

Astra International  QNB Corp

Excellent diversification

The 3 months correlation between Astra and QNB is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and QNB Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QNB 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 QNB Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QNB Corp has no effect on the direction of Astra International i.e., Astra International and QNB Corp go up and down completely randomly.

Pair Corralation between Astra International and QNB Corp

Assuming the 90 days horizon Astra International Tbk is expected to under-perform the QNB Corp. In addition to that, Astra International is 3.77 times more volatile than QNB Corp. It trades about -0.06 of its total potential returns per unit of risk. QNB Corp is currently generating about 0.34 per unit of volatility. If you would invest  3,140  in QNB Corp on September 5, 2024 and sell it today you would earn a total of  160.00  from holding QNB Corp or generate 5.1% 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.  QNB 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 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.

QNB Corp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in QNB Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental drivers, QNB Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Astra International and QNB Corp

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

The idea behind Astra International Tbk and QNB 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.