Correlation Between NFC Indonesia and Superkrane Mitra
Can any of the company-specific risk be diversified away by investing in both NFC Indonesia and Superkrane 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 Superkrane 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 Superkrane Mitra Utama, you can compare the effects of market volatilities on NFC Indonesia and Superkrane 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 Superkrane Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFC Indonesia and Superkrane Mitra.
Diversification Opportunities for NFC Indonesia and Superkrane Mitra
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between NFC and Superkrane is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NFC Indonesia PT and Superkrane Mitra Utama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superkrane Mitra Utama 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 Superkrane Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superkrane Mitra Utama has no effect on the direction of NFC Indonesia i.e., NFC Indonesia and Superkrane Mitra go up and down completely randomly.
Pair Corralation between NFC Indonesia and Superkrane Mitra
Assuming the 90 days trading horizon NFC Indonesia PT is expected to under-perform the Superkrane Mitra. In addition to that, NFC Indonesia is 1.05 times more volatile than Superkrane Mitra Utama. It trades about -0.05 of its total potential returns per unit of risk. Superkrane Mitra Utama is currently generating about 0.02 per unit of volatility. If you would invest 40,711 in Superkrane Mitra Utama on September 3, 2024 and sell it today you would lose (4,111) from holding Superkrane Mitra Utama or give up 10.1% 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. Superkrane Mitra Utama
Performance |
| Timeline |
| NFC Indonesia PT |
| Superkrane Mitra Utama |
NFC Indonesia and Superkrane Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFC Indonesia and Superkrane Mitra
The main advantage of trading using opposite NFC Indonesia and Superkrane Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFC Indonesia position performs unexpectedly, Superkrane 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 Superkrane Mitra will offset losses from the drop in Superkrane Mitra'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 |
| Superkrane Mitra vs. Garudafood Putra Putri | Superkrane Mitra vs. PT Surya Pertiwi | Superkrane Mitra vs. MD Pictures Tbk | Superkrane Mitra vs. PT Mulia Industrindo |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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