Correlation Between Astra International and National Bank
Can any of the company-specific risk be diversified away by investing in both Astra International and National Bank 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 National Bank 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 National Bank of, you can compare the effects of market volatilities on Astra International and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and National Bank.
Diversification Opportunities for Astra International and National Bank
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and National is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Astra International i.e., Astra International and National Bank go up and down completely randomly.
Pair Corralation between Astra International and National Bank
Assuming the 90 days horizon Astra International Tbk is expected to under-perform the National Bank. In addition to that, Astra International is 4.21 times more volatile than National Bank of. It trades about -0.04 of its total potential returns per unit of risk. National Bank of is currently generating about 0.4 per unit of volatility. If you would invest 9,483 in National Bank of on September 4, 2024 and sell it today you would earn a total of 524.00 from holding National Bank of or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Astra International Tbk vs. National Bank of
Performance |
| Timeline |
| Astra International Tbk |
| National Bank |
Astra International and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and National Bank
The main advantage of trading using opposite Astra International and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Astra International vs. OppFi Inc | Astra International vs. Fortinet | Astra International vs. Brera Holdings PLC | Astra International vs. MetLife |
| National Bank vs. Barclays PLC ADR | National Bank vs. Banco Bilbao Viscaya | National Bank vs. Banco Santander SA | National Bank vs. UBS Group AG |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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