Correlation Between Nusa Konstruksi and Catur Sentosa
Can any of the company-specific risk be diversified away by investing in both Nusa Konstruksi and Catur Sentosa 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 Nusa Konstruksi and Catur Sentosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nusa Konstruksi Enjiniring and Catur Sentosa Adiprana, you can compare the effects of market volatilities on Nusa Konstruksi and Catur Sentosa 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 Nusa Konstruksi with a short position of Catur Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusa Konstruksi and Catur Sentosa.
Diversification Opportunities for Nusa Konstruksi and Catur Sentosa
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nusa and Catur is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nusa Konstruksi Enjiniring and Catur Sentosa Adiprana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catur Sentosa Adiprana and Nusa Konstruksi 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 Nusa Konstruksi Enjiniring are associated (or correlated) with Catur Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catur Sentosa Adiprana has no effect on the direction of Nusa Konstruksi i.e., Nusa Konstruksi and Catur Sentosa go up and down completely randomly.
Pair Corralation between Nusa Konstruksi and Catur Sentosa
Assuming the 90 days trading horizon Nusa Konstruksi Enjiniring is expected to under-perform the Catur Sentosa. But the stock apears to be less risky and, when comparing its historical volatility, Nusa Konstruksi Enjiniring is 2.58 times less risky than Catur Sentosa. The stock trades about -0.05 of its potential returns per unit of risk. The Catur Sentosa Adiprana is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 47,400 in Catur Sentosa Adiprana on September 3, 2024 and sell it today you would lose (2,400) from holding Catur Sentosa Adiprana or give up 5.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nusa Konstruksi Enjiniring vs. Catur Sentosa Adiprana
Performance |
| Timeline |
| Nusa Konstruksi Enji |
| Catur Sentosa Adiprana |
Nusa Konstruksi and Catur Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nusa Konstruksi and Catur Sentosa
The main advantage of trading using opposite Nusa Konstruksi and Catur Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nusa Konstruksi position performs unexpectedly, Catur Sentosa 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 Catur Sentosa will offset losses from the drop in Catur Sentosa's long position.| Nusa Konstruksi vs. Sentul City Tbk | Nusa Konstruksi vs. Gozco Plantations Tbk | Nusa Konstruksi vs. Bukit Darmo Property | Nusa Konstruksi vs. Total Bangun Persada |
| Catur Sentosa vs. Nusa Konstruksi Enjiniring | Catur Sentosa vs. Bukit Darmo Property | Catur Sentosa vs. Bayu Buana Tbk | Catur Sentosa vs. Astra Graphia 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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