Correlation Between Media Nusantara and PT Winner
Can any of the company-specific risk be diversified away by investing in both Media Nusantara and PT Winner 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 PT Winner 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 PT Winner Nusantara, you can compare the effects of market volatilities on Media Nusantara and PT Winner 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 PT Winner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Nusantara and PT Winner.
Diversification Opportunities for Media Nusantara and PT Winner
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Media and WINR is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Media Nusantara Citra and PT Winner Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Winner Nusantara 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 PT Winner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Winner Nusantara has no effect on the direction of Media Nusantara i.e., Media Nusantara and PT Winner go up and down completely randomly.
Pair Corralation between Media Nusantara and PT Winner
Assuming the 90 days trading horizon Media Nusantara Citra is expected to under-perform the PT Winner. But the stock apears to be less risky and, when comparing its historical volatility, Media Nusantara Citra is 2.11 times less risky than PT Winner. The stock trades about -0.03 of its potential returns per unit of risk. The PT Winner Nusantara is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,100 in PT Winner Nusantara on September 3, 2024 and sell it today you would earn a total of 300.00 from holding PT Winner Nusantara or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media Nusantara Citra vs. PT Winner Nusantara
Performance |
| Timeline |
| Media Nusantara Citra |
| PT Winner Nusantara |
Media Nusantara and PT Winner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Nusantara and PT Winner
The main advantage of trading using opposite Media Nusantara and PT Winner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Nusantara position performs unexpectedly, PT Winner 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 PT Winner will offset losses from the drop in PT Winner's long position.| Media Nusantara vs. Indosat Tbk | Media Nusantara vs. Energi Mega Persada | Media Nusantara vs. Mitra Pinasthika Mustika | Media Nusantara vs. Jakarta Int Hotels |
| PT Winner vs. Garuda Metalindo Tbk | PT Winner vs. Weha Transportasi Indonesia | PT Winner vs. HK Metals Utama | PT Winner vs. Kedawung Setia Industrial |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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