Correlation Between PT Astra and Broadcom

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

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

Diversification Opportunities for PT Astra and Broadcom

-0.58

Correlation Coefficient

PT Astra  Broadcom

Excellent diversification

The 3 months correlation between PTAIF and Broadcom is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Broadcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadcom and PT Astra 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 PT Astra International are associated (or correlated) with Broadcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadcom has no effect on the direction of PT Astra i.e., PT Astra and Broadcom go up and down completely randomly.

Pair Corralation between PT Astra and Broadcom

Assuming the 90 days horizon PT Astra International is expected to under-perform the Broadcom. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Astra International is 1.9 times less risky than Broadcom. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Broadcom is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  27,513  in Broadcom on July 14, 2025 and sell it today you would earn a total of  4,950  from holding Broadcom or generate 17.99% return on investment over 90 days.

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

PT Astra International  vs.  Broadcom

PT Astra International

Risk-Adjusted Performance

Weakest

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Broadcom

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Broadcom are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Broadcom displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Astra and Broadcom

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

The idea behind PT Astra International and Broadcom 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.