Correlation Between PT Astra and Nomura Research

Can any of the company-specific risk be diversified away by investing in both PT Astra and Nomura Research 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 Nomura Research 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 Nomura Research Institute, you can compare the effects of market volatilities on PT Astra and Nomura Research 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 Nomura Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Nomura Research.

Diversification Opportunities for PT Astra and Nomura Research

-0.76

Correlation Coefficient

PT Astra  Nomura Research

Pay attention - limited upside

The 3 months correlation between PTAIF and Nomura is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Nomura Research Institute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Research Institute 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 Nomura Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Research Institute has no effect on the direction of PT Astra i.e., PT Astra and Nomura Research go up and down completely randomly.

Pair Corralation between PT Astra and Nomura Research

Assuming the 90 days horizon PT Astra International is expected to generate 0.78 times more return on investment than Nomura Research. However, PT Astra International is 1.28 times less risky than Nomura Research. It trades about 0.16 of its potential returns per unit of risk. Nomura Research Institute is currently generating about -0.12 per unit of risk. If you would invest  32.00  in PT Astra International on September 16, 2024 and sell it today you would earn a total of  5.00  from holding PT Astra International or generate 15.63% 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.  Nomura Research Institute

PT Astra International

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Astra International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, PT Astra reported solid returns over the last few months and may actually be approaching a breakup point.

Nomura Research Institute

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nomura Research Institute has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PT Astra and Nomura Research

The main advantage of trading using opposite PT Astra and Nomura Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Nomura Research 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 Nomura Research will offset losses from the drop in Nomura Research's long position.

The idea behind PT Astra International and Nomura Research Institute pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.