Correlation Between Astra International and Rover

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

Diversification Opportunities for Astra International and Rover

-0.67

Correlation Coefficient

Astra International  Rover

Excellent diversification

The 3 months correlation between Astra and Rover is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Rover Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rover 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 Rover. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rover Group has no effect on the direction of Astra International i.e., Astra International and Rover go up and down completely randomly.

Pair Corralation between Astra International and Rover

If you would invest  520.00  in Rover Group on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Rover Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Astra International Tbk  vs.  Rover Group

Astra International Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astra International Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Rover Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rover Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Rover is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Astra International and Rover

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

The idea behind Astra International Tbk and Rover Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.