Correlation Between NMI Holdings and PT Astra
Can any of the company-specific risk be diversified away by investing in both NMI Holdings 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 NMI Holdings and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and PT Astra International, you can compare the effects of market volatilities on NMI Holdings 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 NMI Holdings with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and PT Astra.
Diversification Opportunities for NMI Holdings and PT Astra
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between NMI and ASJA is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings 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 NMI Holdings 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 NMI Holdings 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 NMI Holdings i.e., NMI Holdings and PT Astra go up and down completely randomly.
Pair Corralation between NMI Holdings and PT Astra
Assuming the 90 days horizon NMI Holdings is expected to under-perform the PT Astra. But the stock apears to be less risky and, when comparing its historical volatility, NMI Holdings is 1.86 times less risky than PT Astra. The stock trades about -0.05 of its potential returns per unit of risk. The PT Astra International is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 30.00 in PT Astra International on August 25, 2024 and sell it today you would lose (1.00) from holding PT Astra International or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. PT Astra International
Performance |
| Timeline |
| NMI Holdings |
| PT Astra International |
NMI Holdings and PT Astra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and PT Astra
The main advantage of trading using opposite NMI Holdings and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings 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.| NMI Holdings vs. Lion One Metals | NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. OFFICE DEPOT | NMI Holdings vs. JAPAN TOBACCO UNSPADR12 |
| PT Astra vs. CapitaLand Investment Limited | PT Astra vs. DIVERSIFIED ROYALTY | PT Astra vs. ECHO INVESTMENT ZY | PT Astra vs. SLR Investment Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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