Correlation Between NFC Indonesia and Madusari Murni
Can any of the company-specific risk be diversified away by investing in both NFC Indonesia and Madusari Murni 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 Madusari Murni 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 Madusari Murni Indah, you can compare the effects of market volatilities on NFC Indonesia and Madusari Murni 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 Madusari Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFC Indonesia and Madusari Murni.
Diversification Opportunities for NFC Indonesia and Madusari Murni
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NFC and Madusari is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NFC Indonesia PT and Madusari Murni Indah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madusari Murni Indah 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 Madusari Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madusari Murni Indah has no effect on the direction of NFC Indonesia i.e., NFC Indonesia and Madusari Murni go up and down completely randomly.
Pair Corralation between NFC Indonesia and Madusari Murni
Assuming the 90 days trading horizon NFC Indonesia PT is expected to generate 1.79 times more return on investment than Madusari Murni. However, NFC Indonesia is 1.79 times more volatile than Madusari Murni Indah. It trades about 0.16 of its potential returns per unit of risk. Madusari Murni Indah is currently generating about -0.14 per unit of risk. If you would invest 114,500 in NFC Indonesia PT on November 3, 2024 and sell it today you would earn a total of 24,500 from holding NFC Indonesia PT or generate 21.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.37% |
| Values | Daily Returns |
NFC Indonesia PT vs. Madusari Murni Indah
Performance |
| Timeline |
| NFC Indonesia PT |
| Madusari Murni Indah |
NFC Indonesia and Madusari Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFC Indonesia and Madusari Murni
The main advantage of trading using opposite NFC Indonesia and Madusari Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFC Indonesia position performs unexpectedly, Madusari Murni 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 Madusari Murni will offset losses from the drop in Madusari Murni'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 |
| Madusari Murni vs. Emdeki Utama Tbk | Madusari Murni vs. Kirana Megatara Tbk | Madusari Murni vs. Mahkota Group Tbk | Madusari Murni vs. Sriwahana |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |