Correlation Between Monitronics International and PT Astra

Can any of the company-specific risk be diversified away by investing in both Monitronics International and PT Astra 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 Monitronics International and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Monitronics International and PT Astra International, you can compare the effects of market volatilities on Monitronics International and PT Astra 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 Monitronics International with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monitronics International and PT Astra.

Diversification Opportunities for Monitronics International and PT Astra

0.22

Correlation Coefficient

Monitronics International  PT Astra

Modest diversification

The 3 months correlation between Monitronics and PTAIF is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Monitronics International and PT Astra International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Astra International and Monitronics 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 Monitronics International are associated (or correlated) with PT Astra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Astra International has no effect on the direction of Monitronics International i.e., Monitronics International and PT Astra go up and down completely randomly.

Pair Corralation between Monitronics International and PT Astra

If you would invest  0.01  in Monitronics International on February 1, 2024 and sell it today you would earn a total of  0.00  from holding Monitronics International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Monitronics International  vs.  PT Astra International

Monitronics International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monitronics International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Monitronics International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Monitronics International and PT Astra

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

The idea behind Monitronics International and PT Astra International 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.