Correlation Between PT Astra and Nokian Renkaat
Can any of the company-specific risk be diversified away by investing in both PT Astra and Nokian Renkaat 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 Nokian Renkaat 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 Nokian Renkaat Oyj, you can compare the effects of market volatilities on PT Astra and Nokian Renkaat 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 Nokian Renkaat. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Nokian Renkaat.
Diversification Opportunities for PT Astra and Nokian Renkaat
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PTAIF and Nokian is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Nokian Renkaat Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokian Renkaat Oyj 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 Nokian Renkaat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokian Renkaat Oyj has no effect on the direction of PT Astra i.e., PT Astra and Nokian Renkaat go up and down completely randomly.
Pair Corralation between PT Astra and Nokian Renkaat
Assuming the 90 days horizon PT Astra International is expected to under-perform the Nokian Renkaat. In addition to that, PT Astra is 2.35 times more volatile than Nokian Renkaat Oyj. It trades about -0.22 of its total potential returns per unit of risk. Nokian Renkaat Oyj is currently generating about -0.22 per unit of volatility. If you would invest 800.00 in Nokian Renkaat Oyj on October 20, 2024 and sell it today you would lose (34.00) from holding Nokian Renkaat Oyj or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Astra International vs. Nokian Renkaat Oyj
Performance |
| Timeline |
| PT Astra International |
| Nokian Renkaat Oyj |
PT Astra and Nokian Renkaat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Nokian Renkaat
The main advantage of trading using opposite PT Astra and Nokian Renkaat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Nokian Renkaat 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 Nokian Renkaat will offset losses from the drop in Nokian Renkaat's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
| Nokian Renkaat vs. Luminar Technologies | Nokian Renkaat vs. Mobileye Global Class | Nokian Renkaat vs. Hyliion Holdings Corp | Nokian Renkaat vs. Aeva Technologies |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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