Correlation Between Astra Graphia and M Cash

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

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

Diversification Opportunities for Astra Graphia and M Cash

-0.45

Correlation Coefficient

Astra Graphia  M Cash

Very good diversification

The 3 months correlation between Astra and MCAS is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Astra Graphia Tbk and M Cash Integrasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Cash Integrasi and Astra Graphia 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 Graphia Tbk are associated (or correlated) with M Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Cash Integrasi has no effect on the direction of Astra Graphia i.e., Astra Graphia and M Cash go up and down completely randomly.

Pair Corralation between Astra Graphia and M Cash

Assuming the 90 days trading horizon Astra Graphia Tbk is expected to generate 0.41 times more return on investment than M Cash. However, Astra Graphia Tbk is 2.42 times less risky than M Cash. It trades about 0.11 of its potential returns per unit of risk. M Cash Integrasi is currently generating about -0.09 per unit of risk. If you would invest  82,655  in Astra Graphia Tbk on September 15, 2024 and sell it today you would earn a total of  6,345  from holding Astra Graphia Tbk or generate 7.68% return on investment over 90 days.

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

Astra Graphia Tbk  vs.  M Cash Integrasi

Astra Graphia Tbk

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astra Graphia Tbk are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Astra Graphia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

M Cash Integrasi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days M Cash Integrasi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Astra Graphia and M Cash

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

The idea behind Astra Graphia Tbk and M Cash Integrasi 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.