Correlation Between Asuransi Harta and NFC Indonesia
Can any of the company-specific risk be diversified away by investing in both Asuransi Harta and NFC Indonesia 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 Asuransi Harta and NFC Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asuransi Harta Aman and NFC Indonesia PT, you can compare the effects of market volatilities on Asuransi Harta and NFC Indonesia 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 Asuransi Harta with a short position of NFC Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Harta and NFC Indonesia.
Diversification Opportunities for Asuransi Harta and NFC Indonesia
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asuransi and NFC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Harta Aman and NFC Indonesia PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFC Indonesia PT and Asuransi Harta 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 Asuransi Harta Aman are associated (or correlated) with NFC Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFC Indonesia PT has no effect on the direction of Asuransi Harta i.e., Asuransi Harta and NFC Indonesia go up and down completely randomly.
Pair Corralation between Asuransi Harta and NFC Indonesia
Assuming the 90 days trading horizon Asuransi Harta is expected to generate 2.2 times less return on investment than NFC Indonesia. But when comparing it to its historical volatility, Asuransi Harta Aman is 1.38 times less risky than NFC Indonesia. It trades about 0.02 of its potential returns per unit of risk. NFC Indonesia PT is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 111,000 in NFC Indonesia PT on September 3, 2024 and sell it today you would earn a total of 6,500 from holding NFC Indonesia PT or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asuransi Harta Aman vs. NFC Indonesia PT
Performance |
| Timeline |
| Asuransi Harta Aman |
| NFC Indonesia PT |
Asuransi Harta and NFC Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asuransi Harta and NFC Indonesia
The main advantage of trading using opposite Asuransi Harta and NFC Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asuransi Harta position performs unexpectedly, NFC Indonesia 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 NFC Indonesia will offset losses from the drop in NFC Indonesia's long position.| Asuransi Harta vs. Asuransi Bintang Tbk | Asuransi Harta vs. Asuransi Bina Dana | Asuransi Harta vs. Asuransi Dayin Mitra | Asuransi Harta vs. Asuransi Jasa Tania |
| NFC Indonesia vs. Mitra Pinasthika Mustika | NFC Indonesia vs. Jakarta Int Hotels | NFC Indonesia vs. Asuransi Harta Aman | NFC Indonesia vs. Indosterling Technomedia Tbk |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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