Correlation Between NFC Indonesia and Wir Asia
Can any of the company-specific risk be diversified away by investing in both NFC Indonesia and Wir Asia 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 Wir Asia 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 Wir Asia Tbk, you can compare the effects of market volatilities on NFC Indonesia and Wir Asia 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 Wir Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFC Indonesia and Wir Asia.
Diversification Opportunities for NFC Indonesia and Wir Asia
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NFC and Wir is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding NFC Indonesia PT and Wir Asia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wir Asia Tbk 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 Wir Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wir Asia Tbk has no effect on the direction of NFC Indonesia i.e., NFC Indonesia and Wir Asia go up and down completely randomly.
Pair Corralation between NFC Indonesia and Wir Asia
Assuming the 90 days trading horizon NFC Indonesia PT is expected to generate 1.95 times more return on investment than Wir Asia. However, NFC Indonesia is 1.95 times more volatile than Wir Asia Tbk. It trades about 0.27 of its potential returns per unit of risk. Wir Asia Tbk is currently generating about -0.42 per unit of risk. If you would invest 107,000 in NFC Indonesia PT on August 27, 2024 and sell it today you would earn a total of 38,000 from holding NFC Indonesia PT or generate 35.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NFC Indonesia PT vs. Wir Asia Tbk
Performance |
Timeline |
NFC Indonesia PT |
Wir Asia Tbk |
NFC Indonesia and Wir Asia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NFC Indonesia and Wir Asia
The main advantage of trading using opposite NFC Indonesia and Wir Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFC Indonesia position performs unexpectedly, Wir Asia 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 Wir Asia will offset losses from the drop in Wir Asia'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 |
Wir Asia vs. Multipolar Technology Tbk | Wir Asia vs. Digital Mediatama Maxima | Wir Asia vs. M Cash Integrasi | Wir Asia vs. NFC Indonesia PT |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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