Correlation Between NFC Indonesia and PT Techno9
Can any of the company-specific risk be diversified away by investing in both NFC Indonesia and PT Techno9 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 Techno9 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 Techno9 Indonesia, you can compare the effects of market volatilities on NFC Indonesia and PT Techno9 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 Techno9. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFC Indonesia and PT Techno9.
Diversification Opportunities for NFC Indonesia and PT Techno9
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between NFC and NINE is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding NFC Indonesia PT and PT Techno9 Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Techno9 Indonesia 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 Techno9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Techno9 Indonesia has no effect on the direction of NFC Indonesia i.e., NFC Indonesia and PT Techno9 go up and down completely randomly.
Pair Corralation between NFC Indonesia and PT Techno9
Assuming the 90 days trading horizon NFC Indonesia PT is expected to under-perform the PT Techno9. In addition to that, NFC Indonesia is 1.15 times more volatile than PT Techno9 Indonesia. It trades about -0.33 of its total potential returns per unit of risk. PT Techno9 Indonesia is currently generating about 2.54 per unit of volatility. If you would invest 1,100 in PT Techno9 Indonesia on September 3, 2024 and sell it today you would earn a total of 3,100 from holding PT Techno9 Indonesia or generate 281.82% 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. PT Techno9 Indonesia
Performance |
| Timeline |
| NFC Indonesia PT |
| PT Techno9 Indonesia |
NFC Indonesia and PT Techno9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFC Indonesia and PT Techno9
The main advantage of trading using opposite NFC Indonesia and PT Techno9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFC Indonesia position performs unexpectedly, PT Techno9 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 Techno9 will offset losses from the drop in PT Techno9's long position.| NFC Indonesia vs. Mitra Pinasthika Mustika | NFC Indonesia vs. Jakarta Int Hotels | NFC Indonesia vs. Asuransi Harta Aman | NFC Indonesia vs. Indosterling Technomedia Tbk |
| PT Techno9 vs. Indointernet Tbk PT | PT Techno9 vs. Multipolar Technology Tbk | PT Techno9 vs. Indosterling Technomedia Tbk | PT Techno9 vs. PT Data Sinergitama |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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