Correlation Between Nusa Konstruksi and Intanwijaya Internasional
Can any of the company-specific risk be diversified away by investing in both Nusa Konstruksi and Intanwijaya Internasional 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 Intanwijaya Internasional 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 Intanwijaya Internasional Tbk, you can compare the effects of market volatilities on Nusa Konstruksi and Intanwijaya Internasional 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 Intanwijaya Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusa Konstruksi and Intanwijaya Internasional.
Diversification Opportunities for Nusa Konstruksi and Intanwijaya Internasional
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nusa and Intanwijaya is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nusa Konstruksi Enjiniring and Intanwijaya Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intanwijaya Internasional 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 Intanwijaya Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intanwijaya Internasional has no effect on the direction of Nusa Konstruksi i.e., Nusa Konstruksi and Intanwijaya Internasional go up and down completely randomly.
Pair Corralation between Nusa Konstruksi and Intanwijaya Internasional
Assuming the 90 days trading horizon Nusa Konstruksi Enjiniring is expected to under-perform the Intanwijaya Internasional. But the stock apears to be less risky and, when comparing its historical volatility, Nusa Konstruksi Enjiniring is 1.5 times less risky than Intanwijaya Internasional. The stock trades about -0.25 of its potential returns per unit of risk. The Intanwijaya Internasional Tbk is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 58,500 in Intanwijaya Internasional Tbk on September 12, 2024 and sell it today you would lose (500.00) from holding Intanwijaya Internasional Tbk or give up 0.85% 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. Intanwijaya Internasional Tbk
Performance |
| Timeline |
| Nusa Konstruksi Enji |
| Intanwijaya Internasional |
Nusa Konstruksi and Intanwijaya Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nusa Konstruksi and Intanwijaya Internasional
The main advantage of trading using opposite Nusa Konstruksi and Intanwijaya Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nusa Konstruksi position performs unexpectedly, Intanwijaya Internasional 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 Intanwijaya Internasional will offset losses from the drop in Intanwijaya Internasional's long position.| Nusa Konstruksi vs. PT Indonesia Kendaraan | Nusa Konstruksi vs. Surya Toto Indonesia | Nusa Konstruksi vs. Mitra Pinasthika Mustika | Nusa Konstruksi vs. Integra Indocabinet 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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