Correlation Between PT Astra and Cellebrite

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

Diversification Opportunities for PT Astra and Cellebrite

0.87

Correlation Coefficient

PT Astra  Cellebrite

Very poor diversification

The 3 months correlation between PTAIF and Cellebrite is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Cellebrite DI Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellebrite DI Equity 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 Cellebrite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellebrite DI Equity has no effect on the direction of PT Astra i.e., PT Astra and Cellebrite go up and down completely randomly.

Pair Corralation between PT Astra and Cellebrite

Assuming the 90 days horizon PT Astra is expected to generate 5.42 times less return on investment than Cellebrite. But when comparing it to its historical volatility, PT Astra International is 1.9 times less risky than Cellebrite. It trades about 0.06 of its potential returns per unit of risk. Cellebrite DI Equity is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  238.00  in Cellebrite DI Equity on August 9, 2024 and sell it today you would earn a total of  277.00  from holding Cellebrite DI Equity or generate 116.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	70.97%
Values	Daily Returns

PT Astra International  vs.  Cellebrite DI Equity

PT Astra International

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PT Astra International are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, PT Astra reported solid returns over the last few months and may actually be approaching a breakup point.

Cellebrite DI Equity

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Cellebrite DI Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unfluctuating basic indicators, Cellebrite showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Astra and Cellebrite

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

The idea behind PT Astra International and Cellebrite DI Equity 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.