Correlation Between NFC Indonesia and Sentral Mitra
Can any of the company-specific risk be diversified away by investing in both NFC Indonesia and Sentral Mitra 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 Sentral Mitra 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 Sentral Mitra Informatika, you can compare the effects of market volatilities on NFC Indonesia and Sentral Mitra 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 Sentral Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFC Indonesia and Sentral Mitra.
Diversification Opportunities for NFC Indonesia and Sentral Mitra
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NFC and Sentral is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NFC Indonesia PT and Sentral Mitra Informatika in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentral Mitra Informatika 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 Sentral Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentral Mitra Informatika has no effect on the direction of NFC Indonesia i.e., NFC Indonesia and Sentral Mitra go up and down completely randomly.
Pair Corralation between NFC Indonesia and Sentral Mitra
Assuming the 90 days trading horizon NFC Indonesia PT is expected to under-perform the Sentral Mitra. In addition to that, NFC Indonesia is 1.38 times more volatile than Sentral Mitra Informatika. It trades about -0.09 of its total potential returns per unit of risk. Sentral Mitra Informatika is currently generating about -0.01 per unit of volatility. If you would invest 8,600 in Sentral Mitra Informatika on September 1, 2024 and sell it today you would lose (2,100) from holding Sentral Mitra Informatika or give up 24.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NFC Indonesia PT vs. Sentral Mitra Informatika
Performance |
| Timeline |
| NFC Indonesia PT |
| Sentral Mitra Informatika |
NFC Indonesia and Sentral Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFC Indonesia and Sentral Mitra
The main advantage of trading using opposite NFC Indonesia and Sentral Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFC Indonesia position performs unexpectedly, Sentral Mitra 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 Sentral Mitra will offset losses from the drop in Sentral Mitra's 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 |
| Sentral Mitra vs. PT Dewi Shri | Sentral Mitra vs. Habco Trans Maritima | Sentral Mitra vs. PT Jhonlin Agro | Sentral Mitra vs. Autopedia Sukses Lestari |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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