Correlation Between PT Astra and Partners

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

Diversification Opportunities for PT Astra and Partners

-0.46

Correlation Coefficient

PT Astra  Partners

Very good diversification

The 3 months correlation between PTAIF and Partners is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Partners Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Group 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 Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Group has no effect on the direction of PT Astra i.e., PT Astra and Partners go up and down completely randomly.

Pair Corralation between PT Astra and Partners

Assuming the 90 days horizon PT Astra International is expected to under-perform the Partners. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Astra International is 1.16 times less risky than Partners. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Partners Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  97,758  in Partners Group on January 29, 2024 and sell it today you would earn a total of  34,620  from holding Partners Group or generate 35.41% return on investment over 90 days.

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

PT Astra International  vs.  Partners Group

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 latest weak performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Partners Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Partners Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Partners 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 Partners

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

The idea behind PT Astra International and Partners 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.