Correlation Between NFC Indonesia and Shield On
Can any of the company-specific risk be diversified away by investing in both NFC Indonesia and Shield On 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 Shield On 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 Shield On Service, you can compare the effects of market volatilities on NFC Indonesia and Shield On 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 Shield On. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFC Indonesia and Shield On.
Diversification Opportunities for NFC Indonesia and Shield On
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NFC and Shield is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NFC Indonesia PT and Shield On Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shield On Service 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 Shield On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shield On Service has no effect on the direction of NFC Indonesia i.e., NFC Indonesia and Shield On go up and down completely randomly.
Pair Corralation between NFC Indonesia and Shield On
Assuming the 90 days trading horizon NFC Indonesia PT is expected to under-perform the Shield On. In addition to that, NFC Indonesia is 1.14 times more volatile than Shield On Service. It trades about -0.05 of its total potential returns per unit of risk. Shield On Service is currently generating about 0.05 per unit of volatility. If you would invest 44,344 in Shield On Service on August 27, 2024 and sell it today you would earn a total of 30,656 from holding Shield On Service or generate 69.13% 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. Shield On Service
Performance |
| Timeline |
| NFC Indonesia PT |
| Shield On Service |
NFC Indonesia and Shield On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFC Indonesia and Shield On
The main advantage of trading using opposite NFC Indonesia and Shield On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFC Indonesia position performs unexpectedly, Shield On 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 Shield On will offset losses from the drop in Shield On'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 |
| Shield On vs. Digital Mediatama Maxima | Shield On vs. NFC Indonesia PT | Shield On vs. M Cash Integrasi | Shield On vs. Nusantara Voucher Distribution |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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