Correlation Between Astra International and Unilever Indonesia
Can any of the company-specific risk be diversified away by investing in both Astra International and Unilever Indonesia 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 Unilever Indonesia 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 Unilever Indonesia Tbk, you can compare the effects of market volatilities on Astra International and Unilever Indonesia 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 Unilever Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Unilever Indonesia.
Diversification Opportunities for Astra International and Unilever Indonesia
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Astra and Unilever is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Unilever Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever Indonesia Tbk 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 Unilever Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever Indonesia Tbk has no effect on the direction of Astra International i.e., Astra International and Unilever Indonesia go up and down completely randomly.
Pair Corralation between Astra International and Unilever Indonesia
Assuming the 90 days trading horizon Astra International Tbk is expected to under-perform the Unilever Indonesia. But the stock apears to be less risky and, when comparing its historical volatility, Astra International Tbk is 1.92 times less risky than Unilever Indonesia. The stock trades about -0.01 of its potential returns per unit of risk. The Unilever Indonesia Tbk is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 254,000 in Unilever Indonesia Tbk on February 7, 2024 and sell it today you would earn a total of 5,000 from holding Unilever Indonesia Tbk or generate 1.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Astra International Tbk vs. Unilever Indonesia Tbk
Performance |
Timeline |
Astra International Tbk |
Unilever Indonesia Tbk |
Astra International and Unilever Indonesia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Astra International and Unilever Indonesia
The main advantage of trading using opposite Astra International and Unilever Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Unilever Indonesia 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 Unilever Indonesia will offset losses from the drop in Unilever Indonesia's long position.Astra International vs. Intraco Penta Tbk | Astra International vs. Perdana Bangun Pusaka | Astra International vs. Tanah Laut Tbk |
Unilever Indonesia vs. Fast Food Indonesia | Unilever Indonesia vs. Enseval Putra Megatrading | Unilever Indonesia vs. Hexindo Adiperkasa Tbk | Unilever Indonesia vs. Astra Graphia Tbk |
Check out your portfolio center.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |