Correlation Between NFC Indonesia and MD Pictures
Can any of the company-specific risk be diversified away by investing in both NFC Indonesia and MD Pictures 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 MD Pictures 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 MD Pictures Tbk, you can compare the effects of market volatilities on NFC Indonesia and MD Pictures 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 MD Pictures. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFC Indonesia and MD Pictures.
Diversification Opportunities for NFC Indonesia and MD Pictures
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NFC and FILM is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding NFC Indonesia PT and MD Pictures Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MD Pictures Tbk 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 MD Pictures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MD Pictures Tbk has no effect on the direction of NFC Indonesia i.e., NFC Indonesia and MD Pictures go up and down completely randomly.
Pair Corralation between NFC Indonesia and MD Pictures
Assuming the 90 days trading horizon NFC Indonesia PT is expected to under-perform the MD Pictures. In addition to that, NFC Indonesia is 1.27 times more volatile than MD Pictures Tbk. It trades about -0.13 of its total potential returns per unit of risk. MD Pictures Tbk is currently generating about -0.13 per unit of volatility. If you would invest 473,000 in MD Pictures Tbk on September 2, 2024 and sell it today you would lose (141,000) from holding MD Pictures Tbk or give up 29.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NFC Indonesia PT vs. MD Pictures Tbk
Performance |
| Timeline |
| NFC Indonesia PT |
| MD Pictures Tbk |
NFC Indonesia and MD Pictures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFC Indonesia and MD Pictures
The main advantage of trading using opposite NFC Indonesia and MD Pictures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFC Indonesia position performs unexpectedly, MD Pictures 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 MD Pictures will offset losses from the drop in MD Pictures' long position.| NFC Indonesia vs. M Cash Integrasi | NFC Indonesia vs. Nusantara Voucher Distribution | NFC Indonesia vs. Digital Mediatama Maxima | NFC Indonesia vs. Multipolar Technology Tbk |
| MD Pictures vs. MNC Studios International | MD Pictures vs. Elang Mahkota Teknologi | MD Pictures vs. Medikaloka Hermina PT | MD Pictures vs. Surya Esa Perkasa |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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