Correlation Between Republic Bancorp and PT Astra

Can any of the company-specific risk be diversified away by investing in both Republic Bancorp and PT Astra 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 Republic Bancorp and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Republic Bancorp and PT Astra International, you can compare the effects of market volatilities on Republic Bancorp and PT Astra 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 Republic Bancorp with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Republic Bancorp and PT Astra.

Diversification Opportunities for Republic Bancorp and PT Astra

0.44

Correlation Coefficient

Republic Bancorp  PT Astra

Very weak diversification

The 3 months correlation between Republic and PTAIF is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Republic Bancorp and PT Astra International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Astra International and Republic Bancorp 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 Republic Bancorp are associated (or correlated) with PT Astra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Astra International has no effect on the direction of Republic Bancorp i.e., Republic Bancorp and PT Astra go up and down completely randomly.

Pair Corralation between Republic Bancorp and PT Astra

Assuming the 90 days horizon Republic Bancorp is expected to generate 1.04 times more return on investment than PT Astra. However, Republic Bancorp is 1.04 times more volatile than PT Astra International. It trades about 0.13 of its potential returns per unit of risk. PT Astra International is currently generating about 0.05 per unit of risk. If you would invest  4,874  in Republic Bancorp on September 23, 2024 and sell it today you would earn a total of  2,297  from holding Republic Bancorp or generate 47.13% return on investment over 90 days.

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

Republic Bancorp  vs.  PT Astra International

Republic Bancorp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Republic Bancorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Republic Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PT Astra International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Astra International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, PT Astra is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Republic Bancorp and PT Astra

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

The idea behind Republic Bancorp and PT Astra International 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.