Correlation Between PT Astra and Renault SA
Can any of the company-specific risk be diversified away by investing in both PT Astra and Renault SA 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 Renault SA 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 Renault SA, you can compare the effects of market volatilities on PT Astra and Renault SA 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 Renault SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Renault SA.
Diversification Opportunities for PT Astra and Renault SA
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PTAIF and Renault is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Renault SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renault SA 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 Renault SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renault SA has no effect on the direction of PT Astra i.e., PT Astra and Renault SA go up and down completely randomly.
Pair Corralation between PT Astra and Renault SA
Assuming the 90 days horizon PT Astra is expected to generate 1.86 times less return on investment than Renault SA. In addition to that, PT Astra is 1.43 times more volatile than Renault SA. It trades about 0.03 of its total potential returns per unit of risk. Renault SA is currently generating about 0.07 per unit of volatility. If you would invest 914.00 in Renault SA on November 2, 2024 and sell it today you would earn a total of 115.00 from holding Renault SA or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Astra International vs. Renault SA
Performance |
| Timeline |
| PT Astra International |
| Renault SA |
PT Astra and Renault SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Renault SA
The main advantage of trading using opposite PT Astra and Renault SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Renault SA 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 Renault SA will offset losses from the drop in Renault SA's long position.| PT Astra vs. Sumitomo Chemical Co | PT Astra vs. AB SKF | PT Astra vs. Adecco Group | PT Astra vs. Nitto Denko Corp |
| Renault SA vs. Mazda Motor | Renault SA vs. Subaru Corp ADR | Renault SA vs. Isuzu Motors | Renault SA vs. Yamaha Motor Co |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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