Correlation Between Nanotech Indonesia and Sumber Mas
Can any of the company-specific risk be diversified away by investing in both Nanotech Indonesia and Sumber Mas 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 Sumber Mas 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 Sumber Mas Konstruksi, you can compare the effects of market volatilities on Nanotech Indonesia and Sumber Mas 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 Sumber Mas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanotech Indonesia and Sumber Mas.
Diversification Opportunities for Nanotech Indonesia and Sumber Mas
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nanotech and Sumber is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nanotech Indonesia Global and Sumber Mas Konstruksi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Mas Konstruksi 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 Sumber Mas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Mas Konstruksi has no effect on the direction of Nanotech Indonesia i.e., Nanotech Indonesia and Sumber Mas go up and down completely randomly.
Pair Corralation between Nanotech Indonesia and Sumber Mas
Assuming the 90 days trading horizon Nanotech Indonesia Global is expected to generate 0.98 times more return on investment than Sumber Mas. However, Nanotech Indonesia Global is 1.02 times less risky than Sumber Mas. It trades about 0.04 of its potential returns per unit of risk. Sumber Mas Konstruksi is currently generating about -0.13 per unit of risk. If you would invest 2,400 in Nanotech Indonesia Global on November 3, 2024 and sell it today you would earn a total of 1,000.00 from holding Nanotech Indonesia Global or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.77% |
| Values | Daily Returns |
Nanotech Indonesia Global vs. Sumber Mas Konstruksi
Performance |
| Timeline |
| Nanotech Indonesia Global |
| Sumber Mas Konstruksi |
Nanotech Indonesia and Sumber Mas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanotech Indonesia and Sumber Mas
The main advantage of trading using opposite Nanotech Indonesia and Sumber Mas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanotech Indonesia position performs unexpectedly, Sumber Mas 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 Sumber Mas will offset losses from the drop in Sumber Mas' long position.| Nanotech Indonesia vs. Sumber Tani Agung | Nanotech Indonesia vs. Dayamitra Telekomunikasi PT | Nanotech Indonesia vs. Wahana Inti MakmurTbk | Nanotech Indonesia vs. Wir Asia Tbk |
| Sumber Mas vs. Wahana Inti MakmurTbk | Sumber Mas vs. Sumber Tani Agung | Sumber Mas vs. Nanotech Indonesia Global | Sumber Mas vs. RMK Energy PT |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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