Correlation Between PT Astra and New Era

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

Diversification Opportunities for PT Astra and New Era

-0.6

Correlation Coefficient

PT Astra  New Era

Excellent diversification

The 3 months correlation between PTAIF and New is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and New Era Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Era Energy 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 New Era. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Era Energy has no effect on the direction of PT Astra i.e., PT Astra and New Era go up and down completely randomly.

Pair Corralation between PT Astra and New Era

Assuming the 90 days horizon PT Astra International is expected to under-perform the New Era. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Astra International is 37.82 times less risky than New Era. The pink sheet trades about -0.17 of its potential returns per unit of risk. The New Era Energy is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  49.00  in New Era Energy on August 24, 2025 and sell it today you would earn a total of  331.00  from holding New Era Energy or generate 675.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	56.25%
Values	Daily Returns

PT Astra International  vs.  New Era Energy

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

New Era Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in New Era Energy are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, New Era demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Astra and New Era

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

The idea behind PT Astra International and New Era Energy 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.