Correlation Between Media Nusantara and XL Axiata
Can any of the company-specific risk be diversified away by investing in both Media Nusantara and XL Axiata 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 Media Nusantara and XL Axiata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media Nusantara Citra and XL Axiata Tbk, you can compare the effects of market volatilities on Media Nusantara and XL Axiata 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 Media Nusantara with a short position of XL Axiata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Nusantara and XL Axiata.
Diversification Opportunities for Media Nusantara and XL Axiata
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Media and EXCL is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Media Nusantara Citra and XL Axiata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Axiata Tbk and Media Nusantara 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 Media Nusantara Citra are associated (or correlated) with XL Axiata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Axiata Tbk has no effect on the direction of Media Nusantara i.e., Media Nusantara and XL Axiata go up and down completely randomly.
Pair Corralation between Media Nusantara and XL Axiata
Assuming the 90 days trading horizon Media Nusantara Citra is expected to under-perform the XL Axiata. In addition to that, Media Nusantara is 1.92 times more volatile than XL Axiata Tbk. It trades about -0.1 of its total potential returns per unit of risk. XL Axiata Tbk is currently generating about 0.03 per unit of volatility. If you would invest 225,000 in XL Axiata Tbk on October 26, 2024 and sell it today you would earn a total of 4,000 from holding XL Axiata Tbk or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media Nusantara Citra vs. XL Axiata Tbk
Performance |
| Timeline |
| Media Nusantara Citra |
| XL Axiata Tbk |
Media Nusantara and XL Axiata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Nusantara and XL Axiata
The main advantage of trading using opposite Media Nusantara and XL Axiata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Nusantara position performs unexpectedly, XL Axiata 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 XL Axiata will offset losses from the drop in XL Axiata's long position.| Media Nusantara vs. Global Mediacom Tbk | Media Nusantara vs. Surya Citra Media | Media Nusantara vs. Akr Corporindo Tbk | Media Nusantara vs. Bumi Serpong Damai |
| XL Axiata vs. Indosat Tbk | XL Axiata vs. Jasa Marga Tbk | XL Axiata vs. Indocement Tunggal Prakarsa | XL Axiata vs. Semen Indonesia Persero |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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