Correlation Between Marie Brizard and PT Astra

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

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

Diversification Opportunities for Marie Brizard and PT Astra

0.01

Correlation Coefficient

Marie Brizard  PT Astra

Significant diversification

The 3 months correlation between Marie and ASJA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Marie Brizard Wine 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 Marie Brizard 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 Marie Brizard Wine 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 Marie Brizard i.e., Marie Brizard and PT Astra go up and down completely randomly.

Pair Corralation between Marie Brizard and PT Astra

Assuming the 90 days trading horizon Marie Brizard is expected to generate 14.28 times less return on investment than PT Astra. But when comparing it to its historical volatility, Marie Brizard Wine is 2.55 times less risky than PT Astra. It trades about 0.04 of its potential returns per unit of risk. PT Astra International is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  28.00  in PT Astra International on September 12, 2024 and sell it today you would earn a total of  5.00  from holding PT Astra International or generate 17.86% return on investment over 90 days.

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

Marie Brizard Wine  vs.  PT Astra International

Marie Brizard Wine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marie Brizard Wine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Marie Brizard is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

PT Astra International

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Astra International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, PT Astra reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marie Brizard and PT Astra

The main advantage of trading using opposite Marie Brizard and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marie Brizard 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 Marie Brizard Wine 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.