Correlation Between NFC Indonesia and PT Surya
Can any of the company-specific risk be diversified away by investing in both NFC Indonesia and PT Surya 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 Surya 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 Surya Pertiwi, you can compare the effects of market volatilities on NFC Indonesia and PT Surya 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 Surya. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFC Indonesia and PT Surya.
Diversification Opportunities for NFC Indonesia and PT Surya
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NFC and SPTO is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NFC Indonesia PT and PT Surya Pertiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Surya Pertiwi 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 Surya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Surya Pertiwi has no effect on the direction of NFC Indonesia i.e., NFC Indonesia and PT Surya go up and down completely randomly.
Pair Corralation between NFC Indonesia and PT Surya
Assuming the 90 days trading horizon NFC Indonesia PT is expected to under-perform the PT Surya. In addition to that, NFC Indonesia is 4.13 times more volatile than PT Surya Pertiwi. It trades about -0.08 of its total potential returns per unit of risk. PT Surya Pertiwi is currently generating about 0.08 per unit of volatility. If you would invest 52,806 in PT Surya Pertiwi on August 24, 2024 and sell it today you would earn a total of 13,194 from holding PT Surya Pertiwi or generate 24.99% 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 Surya Pertiwi
Performance |
| Timeline |
| NFC Indonesia PT |
| PT Surya Pertiwi |
NFC Indonesia and PT Surya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFC Indonesia and PT Surya
The main advantage of trading using opposite NFC Indonesia and PT Surya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFC Indonesia position performs unexpectedly, PT Surya 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 Surya will offset losses from the drop in PT Surya's long position.| NFC Indonesia vs. Mitra Pinasthika Mustika | NFC Indonesia vs. Integra Indocabinet Tbk | NFC Indonesia vs. Indosat Tbk | NFC Indonesia vs. Gajah Tunggal Tbk |
| PT Surya vs. PT Indonesia Kendaraan | PT Surya vs. Cikarang Listrindo Tbk | PT Surya vs. PT Sarimelati Kencana | PT Surya vs. Surya Toto Indonesia |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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