Correlation Between NorAm Drilling and PT Astra
Can any of the company-specific risk be diversified away by investing in both NorAm Drilling 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 NorAm Drilling and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NorAm Drilling AS and PT Astra International, you can compare the effects of market volatilities on NorAm Drilling 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 NorAm Drilling with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of NorAm Drilling and PT Astra.
Diversification Opportunities for NorAm Drilling and PT Astra
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NorAm and ASJA is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NorAm Drilling AS 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 NorAm Drilling 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 NorAm Drilling AS 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 NorAm Drilling i.e., NorAm Drilling and PT Astra go up and down completely randomly.
Pair Corralation between NorAm Drilling and PT Astra
Assuming the 90 days horizon NorAm Drilling AS is expected to generate 1.14 times more return on investment than PT Astra. However, NorAm Drilling is 1.14 times more volatile than PT Astra International. It trades about 0.02 of its potential returns per unit of risk. PT Astra International is currently generating about -0.02 per unit of risk. If you would invest 311.00 in NorAm Drilling AS on August 25, 2024 and sell it today you would lose (2.00) from holding NorAm Drilling AS or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NorAm Drilling AS vs. PT Astra International
Performance |
| Timeline |
| NorAm Drilling AS |
| PT Astra International |
NorAm Drilling and PT Astra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NorAm Drilling and PT Astra
The main advantage of trading using opposite NorAm Drilling and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorAm Drilling 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.| NorAm Drilling vs. VIRGIN WINES UK | NorAm Drilling vs. Haier Smart Home | NorAm Drilling vs. Neinor Homes SA | NorAm Drilling vs. VIVA WINE GROUP |
| PT Astra vs. CapitaLand Investment Limited | PT Astra vs. DIVERSIFIED ROYALTY | PT Astra vs. ECHO INVESTMENT ZY | PT Astra vs. SLR Investment Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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