Correlation Between Astra International and 4 Less
Can any of the company-specific risk be diversified away by investing in both Astra International and 4 Less 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 4 Less 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 4 Less Group, you can compare the effects of market volatilities on Astra International and 4 Less 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 4 Less. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and 4 Less.
Diversification Opportunities for Astra International and 4 Less
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astra and FLES is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and 4 Less Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4 Less Group 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 4 Less. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4 Less Group has no effect on the direction of Astra International i.e., Astra International and 4 Less go up and down completely randomly.
Pair Corralation between Astra International and 4 Less
Assuming the 90 days horizon Astra International Tbk is expected to under-perform the 4 Less. But the pink sheet apears to be less risky and, when comparing its historical volatility, Astra International Tbk is 9.82 times less risky than 4 Less. The pink sheet trades about -0.08 of its potential returns per unit of risk. The 4 Less Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.04 in 4 Less Group on September 25, 2024 and sell it today you would lose (0.02) from holding 4 Less Group or give up 50.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 96.92% |
Values | Daily Returns |
Astra International Tbk vs. 4 Less Group
Performance |
Timeline |
Astra International Tbk |
4 Less Group |
Astra International and 4 Less Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Astra International and 4 Less
The main advantage of trading using opposite Astra International and 4 Less positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, 4 Less 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 4 Less will offset losses from the drop in 4 Less' long position.Astra International vs. BKV Corporation | Astra International vs. Republic Bancorp | Astra International vs. KKR Co LP | Astra International vs. Obayashi |
4 Less vs. Triad Pro Innovators | 4 Less vs. ABCO Energy | 4 Less vs. Holiday Island Holdings | 4 Less vs. RCABS Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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