Correlation Between NFC Indonesia and PT Data
Can any of the company-specific risk be diversified away by investing in both NFC Indonesia and PT Data 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 NFC Indonesia and PT Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NFC Indonesia PT and PT Data Sinergitama, you can compare the effects of market volatilities on NFC Indonesia and PT Data 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 NFC Indonesia with a short position of PT Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFC Indonesia and PT Data.
Diversification Opportunities for NFC Indonesia and PT Data
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NFC and ELIT is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding NFC Indonesia PT and PT Data Sinergitama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Data Sinergitama and NFC 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 NFC Indonesia PT are associated (or correlated) with PT Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Data Sinergitama has no effect on the direction of NFC Indonesia i.e., NFC Indonesia and PT Data go up and down completely randomly.
Pair Corralation between NFC Indonesia and PT Data
Assuming the 90 days trading horizon NFC Indonesia PT is expected to under-perform the PT Data. But the stock apears to be less risky and, when comparing its historical volatility, NFC Indonesia PT is 1.06 times less risky than PT Data. The stock trades about -0.05 of its potential returns per unit of risk. The PT Data Sinergitama is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 28,481 in PT Data Sinergitama on January 13, 2025 and sell it today you would lose (10,681) from holding PT Data Sinergitama or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NFC Indonesia PT vs. PT Data Sinergitama
Performance |
| Timeline |
| NFC Indonesia PT |
| PT Data Sinergitama |
NFC Indonesia and PT Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFC Indonesia and PT Data
The main advantage of trading using opposite NFC Indonesia and PT Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFC Indonesia position performs unexpectedly, PT Data 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 Data will offset losses from the drop in PT Data's long position.| NFC Indonesia vs. Singaraja Putra | NFC Indonesia vs. Matahari Putra Prima | NFC Indonesia vs. Lippo Cikarang Tbk | NFC Indonesia vs. Integra Indocabinet Tbk |
| PT Data vs. Arkadia Digital Media | PT Data vs. Diamond Food Indonesia | PT Data vs. Fast Food Indonesia | PT Data vs. Indonesian Tobacco 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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