Correlation Between Fks Multi and Nusa Raya
Can any of the company-specific risk be diversified away by investing in both Fks Multi and Nusa Raya 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 Fks Multi and Nusa Raya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fks Multi Agro and Nusa Raya Cipta, you can compare the effects of market volatilities on Fks Multi and Nusa Raya 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 Fks Multi with a short position of Nusa Raya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fks Multi and Nusa Raya.
Diversification Opportunities for Fks Multi and Nusa Raya
Poor diversification
The 3 months correlation between Fks and Nusa is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fks Multi Agro and Nusa Raya Cipta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusa Raya Cipta and Fks Multi 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 Fks Multi Agro are associated (or correlated) with Nusa Raya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusa Raya Cipta has no effect on the direction of Fks Multi i.e., Fks Multi and Nusa Raya go up and down completely randomly.
Pair Corralation between Fks Multi and Nusa Raya
Assuming the 90 days trading horizon Fks Multi Agro is expected to generate 0.05 times more return on investment than Nusa Raya. However, Fks Multi Agro is 20.45 times less risky than Nusa Raya. It trades about -0.31 of its potential returns per unit of risk. Nusa Raya Cipta is currently generating about -0.14 per unit of risk. If you would invest 1,100,000 in Fks Multi Agro on August 25, 2024 and sell it today you would lose (10,000) from holding Fks Multi Agro or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fks Multi Agro vs. Nusa Raya Cipta
Performance |
| Timeline |
| Fks Multi Agro |
| Nusa Raya Cipta |
Fks Multi and Nusa Raya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fks Multi and Nusa Raya
The main advantage of trading using opposite Fks Multi and Nusa Raya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fks Multi position performs unexpectedly, Nusa Raya 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 Nusa Raya will offset losses from the drop in Nusa Raya's long position.| Fks Multi vs. Charoen Pokphand Indonesia | Fks Multi vs. Kalbe Farma Tbk | Fks Multi vs. Indofood Cbp Sukses | Fks Multi vs. PT Indofood Sukses |
| Nusa Raya vs. Total Bangun Persada | Nusa Raya vs. Surya Semesta Internusa | Nusa Raya vs. Acset Indonusa Tbk | Nusa Raya vs. Mitra Pinasthika Mustika |
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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