Correlation Between PT Astra and Worldline

Can any of the company-specific risk be diversified away by investing in both PT Astra and Worldline 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 Worldline 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 Worldline SA, you can compare the effects of market volatilities on PT Astra and Worldline 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 Worldline. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Worldline.

Diversification Opportunities for PT Astra and Worldline

-0.52

Correlation Coefficient

PT Astra  Worldline

Excellent diversification

The 3 months correlation between PTAIF and Worldline is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Worldline SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldline SA 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 Worldline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldline SA has no effect on the direction of PT Astra i.e., PT Astra and Worldline go up and down completely randomly.

Pair Corralation between PT Astra and Worldline

Assuming the 90 days horizon PT Astra International is expected to under-perform the Worldline. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Astra International is 1.84 times less risky than Worldline. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Worldline SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  977.00  in Worldline SA on September 24, 2024 and sell it today you would lose (77.00) from holding Worldline SA or give up 7.88% of portfolio value over 90 days.

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

PT Astra International  vs.  Worldline SA

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 abnormal performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Worldline SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PT Astra and Worldline

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

The idea behind PT Astra International and Worldline SA 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.