Correlation Between NFC Indonesia and Multipolar Technology
Can any of the company-specific risk be diversified away by investing in both NFC Indonesia and Multipolar Technology 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 Multipolar Technology 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 Multipolar Technology Tbk, you can compare the effects of market volatilities on NFC Indonesia and Multipolar Technology 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 Multipolar Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFC Indonesia and Multipolar Technology.
Diversification Opportunities for NFC Indonesia and Multipolar Technology
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NFC and Multipolar is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding NFC Indonesia PT and Multipolar Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multipolar Technology 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 Multipolar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multipolar Technology Tbk has no effect on the direction of NFC Indonesia i.e., NFC Indonesia and Multipolar Technology go up and down completely randomly.
Pair Corralation between NFC Indonesia and Multipolar Technology
Assuming the 90 days trading horizon NFC Indonesia PT is expected to under-perform the Multipolar Technology. But the stock apears to be less risky and, when comparing its historical volatility, NFC Indonesia PT is 1.2 times less risky than Multipolar Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Multipolar Technology Tbk is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 132,212 in Multipolar Technology Tbk on August 27, 2024 and sell it today you would earn a total of 2,367,788 from holding Multipolar Technology Tbk or generate 1790.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NFC Indonesia PT vs. Multipolar Technology Tbk
Performance |
| Timeline |
| NFC Indonesia PT |
| Multipolar Technology Tbk |
NFC Indonesia and Multipolar Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFC Indonesia and Multipolar Technology
The main advantage of trading using opposite NFC Indonesia and Multipolar Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFC Indonesia position performs unexpectedly, Multipolar Technology 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 Multipolar Technology will offset losses from the drop in Multipolar Technology'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 |
| Multipolar Technology vs. Multipolar Tbk | Multipolar Technology vs. Astra Graphia Tbk | Multipolar Technology vs. Matahari Putra Prima | Multipolar Technology vs. Ramayana Lestari Sentosa |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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