Correlation Between Nanotech Indonesia and Pertamina Geothermal
Can any of the company-specific risk be diversified away by investing in both Nanotech Indonesia and Pertamina Geothermal 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 Nanotech Indonesia and Pertamina Geothermal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanotech Indonesia Global and Pertamina Geothermal Energy, you can compare the effects of market volatilities on Nanotech Indonesia and Pertamina Geothermal 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 Nanotech Indonesia with a short position of Pertamina Geothermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanotech Indonesia and Pertamina Geothermal.
Diversification Opportunities for Nanotech Indonesia and Pertamina Geothermal
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nanotech and Pertamina is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nanotech Indonesia Global and Pertamina Geothermal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pertamina Geothermal and Nanotech Indonesia 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 Nanotech Indonesia Global are associated (or correlated) with Pertamina Geothermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pertamina Geothermal has no effect on the direction of Nanotech Indonesia i.e., Nanotech Indonesia and Pertamina Geothermal go up and down completely randomly.
Pair Corralation between Nanotech Indonesia and Pertamina Geothermal
Assuming the 90 days trading horizon Nanotech Indonesia Global is expected to generate 2.38 times more return on investment than Pertamina Geothermal. However, Nanotech Indonesia is 2.38 times more volatile than Pertamina Geothermal Energy. It trades about 0.21 of its potential returns per unit of risk. Pertamina Geothermal Energy is currently generating about -0.28 per unit of risk. If you would invest 1,800 in Nanotech Indonesia Global on September 1, 2024 and sell it today you would earn a total of 300.00 from holding Nanotech Indonesia Global or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanotech Indonesia Global vs. Pertamina Geothermal Energy
Performance |
| Timeline |
| Nanotech Indonesia Global |
| Pertamina Geothermal |
Nanotech Indonesia and Pertamina Geothermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanotech Indonesia and Pertamina Geothermal
The main advantage of trading using opposite Nanotech Indonesia and Pertamina Geothermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanotech Indonesia position performs unexpectedly, Pertamina Geothermal 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 Pertamina Geothermal will offset losses from the drop in Pertamina Geothermal's long position.| Nanotech Indonesia vs. Sumber Tani Agung | Nanotech Indonesia vs. Wahana Inti MakmurTbk | Nanotech Indonesia vs. Integra Indocabinet Tbk | Nanotech Indonesia vs. Multistrada Arah Sarana |
| Pertamina Geothermal vs. Ashmore Asset Management | Pertamina Geothermal vs. HK Metals Utama | Pertamina Geothermal vs. Lotte Chemical Titan | Pertamina Geothermal vs. Diamond Food Indonesia |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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