Correlation Between M Cash and NFC Indonesia
Can any of the company-specific risk be diversified away by investing in both M Cash 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 M Cash and NFC Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Cash Integrasi and NFC Indonesia PT, you can compare the effects of market volatilities on M Cash 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 M Cash with a short position of NFC Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Cash and NFC Indonesia.
Diversification Opportunities for M Cash and NFC Indonesia
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between MCAS and NFC is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding M Cash Integrasi 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 M Cash 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 M Cash Integrasi 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 M Cash i.e., M Cash and NFC Indonesia go up and down completely randomly.
Pair Corralation between M Cash and NFC Indonesia
Assuming the 90 days trading horizon M Cash Integrasi is expected to under-perform the NFC Indonesia. But the stock apears to be less risky and, when comparing its historical volatility, M Cash Integrasi is 1.99 times less risky than NFC Indonesia. The stock trades about -0.19 of its potential returns per unit of risk. The NFC Indonesia PT is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 109,000 in NFC Indonesia PT on August 24, 2024 and sell it today you would earn a total of 36,000 from holding NFC Indonesia PT or generate 33.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
M Cash Integrasi vs. NFC Indonesia PT
Performance |
| Timeline |
| M Cash Integrasi |
| NFC Indonesia PT |
M Cash and NFC Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Cash and NFC Indonesia
The main advantage of trading using opposite M Cash and NFC Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Cash 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.| M Cash vs. Multipolar Tbk | M Cash vs. Astra Graphia Tbk | M Cash vs. Matahari Putra Prima | M Cash vs. Ramayana Lestari Sentosa |
| NFC Indonesia vs. M Cash Integrasi | NFC Indonesia vs. Nusantara Voucher Distribution | NFC Indonesia vs. Digital Mediatama Maxima | NFC Indonesia vs. Multipolar Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |