Correlation Between Astra International and Nokian Renkaat
Can any of the company-specific risk be diversified away by investing in both Astra International 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 Astra International and Nokian Renkaat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra International Tbk and Nokian Renkaat Oyj, you can compare the effects of market volatilities on Astra International 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 Astra International with a short position of Nokian Renkaat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Nokian Renkaat.
Diversification Opportunities for Astra International and Nokian Renkaat
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astra and Nokian is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk 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 Astra International 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 Astra International Tbk 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 Astra International i.e., Astra International and Nokian Renkaat go up and down completely randomly.
Pair Corralation between Astra International and Nokian Renkaat
Assuming the 90 days horizon Astra International Tbk is expected to generate 0.77 times more return on investment than Nokian Renkaat. However, Astra International Tbk is 1.3 times less risky than Nokian Renkaat. It trades about 0.04 of its potential returns per unit of risk. Nokian Renkaat Oyj is currently generating about -0.22 per unit of risk. If you would invest 635.00 in Astra International Tbk on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Astra International Tbk or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra International Tbk vs. Nokian Renkaat Oyj
Performance |
| Timeline |
| Astra International Tbk |
| Nokian Renkaat Oyj |
Astra International and Nokian Renkaat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Nokian Renkaat
The main advantage of trading using opposite Astra International and Nokian Renkaat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International 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.| Astra International vs. Allison Transmission Holdings | Astra International vs. Luminar Technologies | Astra International vs. Lear Corporation | Astra International vs. BorgWarner |
| Nokian Renkaat vs. PT Astra International | Nokian Renkaat vs. Astra International Tbk | Nokian Renkaat vs. Mobileye Global Class | Nokian Renkaat vs. HUMANA INC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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