Correlation Between PT Astra and NUBI Old

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

Diversification Opportunities for PT Astra and NUBI Old

-0.69

Correlation Coefficient

PT Astra  NUBI Old

Excellent diversification

The 3 months correlation between PTAIF and NUBI is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and NUBI Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NUBI Old 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 NUBI Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NUBI Old has no effect on the direction of PT Astra i.e., PT Astra and NUBI Old go up and down completely randomly.

Pair Corralation between PT Astra and NUBI Old

Assuming the 90 days horizon PT Astra International is expected to generate 27.06 times more return on investment than NUBI Old. However, PT Astra is 27.06 times more volatile than NUBI Old. It trades about 0.02 of its potential returns per unit of risk. NUBI Old is currently generating about 0.11 per unit of risk. If you would invest  31.00  in PT Astra International on October 10, 2024 and sell it today you would lose (4.00) from holding PT Astra International or give up 12.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	40.63%
Values	Daily Returns

PT Astra International  vs.  NUBI Old

PT Astra International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Astra International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NUBI Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NUBI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, NUBI Old is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with PT Astra and NUBI Old

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

The idea behind PT Astra International and NUBI Old 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.