Correlation Between PT Astra and Monolithic Power

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

Diversification Opportunities for PT Astra and Monolithic Power

-0.49

Correlation Coefficient

PT Astra  Monolithic Power

Very good diversification

The 3 months correlation between PTAIF and Monolithic is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Monolithic Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monolithic Power Systems 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 Monolithic Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monolithic Power Systems has no effect on the direction of PT Astra i.e., PT Astra and Monolithic Power go up and down completely randomly.

Pair Corralation between PT Astra and Monolithic Power

Assuming the 90 days horizon PT Astra International is expected to under-perform the Monolithic Power. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Astra International is 5.03 times less risky than Monolithic Power. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Monolithic Power Systems is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  83,639  in Monolithic Power Systems on July 24, 2025 and sell it today you would earn a total of  16,501  from holding Monolithic Power Systems or generate 19.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

PT Astra International  vs.  Monolithic Power Systems

PT Astra International

Risk-Adjusted Performance

Weakest

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Monolithic Power Systems

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Monolithic Power Systems are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Monolithic Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Astra and Monolithic Power

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

The idea behind PT Astra International and Monolithic Power Systems 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.