Correlation Between Natura City and Pollux Investasi
Can any of the company-specific risk be diversified away by investing in both Natura City and Pollux Investasi 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 Natura City and Pollux Investasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natura City Developments and Pollux Investasi Internasional, you can compare the effects of market volatilities on Natura City and Pollux Investasi 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 Natura City with a short position of Pollux Investasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natura City and Pollux Investasi.
Diversification Opportunities for Natura City and Pollux Investasi
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Natura and Pollux is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Natura City Developments and Pollux Investasi Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pollux Investasi Int and Natura City 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 Natura City Developments are associated (or correlated) with Pollux Investasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pollux Investasi Int has no effect on the direction of Natura City i.e., Natura City and Pollux Investasi go up and down completely randomly.
Pair Corralation between Natura City and Pollux Investasi
Assuming the 90 days trading horizon Natura City Developments is expected to generate 2.82 times more return on investment than Pollux Investasi. However, Natura City is 2.82 times more volatile than Pollux Investasi Internasional. It trades about 0.13 of its potential returns per unit of risk. Pollux Investasi Internasional is currently generating about 0.05 per unit of risk. If you would invest 5,000 in Natura City Developments on August 30, 2024 and sell it today you would earn a total of 7,100 from holding Natura City Developments or generate 142.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natura City Developments vs. Pollux Investasi Internasional
Performance |
| Timeline |
| Natura City Developments |
| Pollux Investasi Int |
Natura City and Pollux Investasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natura City and Pollux Investasi
The main advantage of trading using opposite Natura City and Pollux Investasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natura City position performs unexpectedly, Pollux Investasi 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 Pollux Investasi will offset losses from the drop in Pollux Investasi's long position.| Natura City vs. Bakrie Brothers Tbk | Natura City vs. Bakrie Sumatera Plantations | Natura City vs. Energi Mega Persada | Natura City vs. Darma Henwa Tbk |
| Pollux Investasi vs. Pollux Properti Indonesia | Pollux Investasi vs. Maha Properti Indonesia | Pollux Investasi vs. Mega Manunggal Property | Pollux Investasi vs. Urban Jakarta Propertindo |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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