Correlation Between Astra International and Unico American

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

Diversification Opportunities for Astra International and Unico American

-0.59

Correlation Coefficient

Astra International  Unico American

Excellent diversification

The 3 months correlation between Astra and Unico is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Unico American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unico American 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 Unico American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unico American has no effect on the direction of Astra International i.e., Astra International and Unico American go up and down completely randomly.

Pair Corralation between Astra International and Unico American

Assuming the 90 days horizon Astra International is expected to generate 6.18 times less return on investment than Unico American. But when comparing it to its historical volatility, Astra International Tbk is 4.0 times less risky than Unico American. It trades about 0.19 of its potential returns per unit of risk. Unico American is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  5.80  in Unico American on October 26, 2024 and sell it today you would earn a total of  2.31  from holding Unico American or generate 39.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Astra International Tbk  vs.  Unico American

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.

Unico American

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unico American are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Unico American displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astra International and Unico American

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

The idea behind Astra International Tbk and Unico American 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.