Correlation Between PT Astra and Dunelm Group

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

Diversification Opportunities for PT Astra and Dunelm Group

-0.38

Correlation Coefficient

PT Astra  Dunelm Group

Very good diversification

The 3 months correlation between PTAIF and Dunelm is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Dunelm Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunelm Group PLC 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 Dunelm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunelm Group PLC has no effect on the direction of PT Astra i.e., PT Astra and Dunelm Group go up and down completely randomly.

Pair Corralation between PT Astra and Dunelm Group

Assuming the 90 days horizon PT Astra International is expected to under-perform the Dunelm Group. In addition to that, PT Astra is 1.3 times more volatile than Dunelm Group PLC. It trades about 0.0 of its total potential returns per unit of risk. Dunelm Group PLC is currently generating about 0.04 per unit of volatility. If you would invest  997.00  in Dunelm Group PLC on February 17, 2024 and sell it today you would earn a total of  392.00  from holding Dunelm Group PLC or generate 39.32% return on investment over 90 days.

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

PT Astra International  vs.  Dunelm Group PLC

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 nearly stable forward indicators, PT Astra is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Dunelm Group PLC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dunelm Group PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Dunelm Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PT Astra and Dunelm Group

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

The idea behind PT Astra International and Dunelm Group PLC 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.