Correlation Between NOHO and PT Astra
Can any of the company-specific risk be diversified away by investing in both NOHO 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 NOHO and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NOHO Inc and PT Astra International, you can compare the effects of market volatilities on NOHO 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 NOHO with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOHO and PT Astra.
Diversification Opportunities for NOHO and PT Astra
Modest diversification
The 3 months correlation between NOHO and ASII is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding NOHO Inc 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 NOHO 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 NOHO Inc 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 NOHO i.e., NOHO and PT Astra go up and down completely randomly.
Pair Corralation between NOHO and PT Astra
Given the investment horizon of 90 days NOHO Inc is expected to generate 1.72 times more return on investment than PT Astra. However, NOHO is 1.72 times more volatile than PT Astra International. It trades about 0.16 of its potential returns per unit of risk. PT Astra International is currently generating about 0.09 per unit of risk. If you would invest 0.01 in NOHO Inc on October 21, 2024 and sell it today you would earn a total of 0.01 from holding NOHO Inc or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
NOHO Inc vs. PT Astra International
Performance |
| Timeline |
| NOHO Inc |
| PT Astra International |
NOHO and PT Astra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NOHO and PT Astra
The main advantage of trading using opposite NOHO and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOHO 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 NOHO Inc 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.| PT Astra vs. Embotelladora Andina SA | PT Astra vs. Embotelladora Andina SA | PT Astra vs. Apple Rush | PT Astra vs. Alkame Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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