Correlation Between Nusa Palapa and PT Harapan
Can any of the company-specific risk be diversified away by investing in both Nusa Palapa and PT Harapan 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 Nusa Palapa and PT Harapan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nusa Palapa Gemilang and PT Harapan Duta, you can compare the effects of market volatilities on Nusa Palapa and PT Harapan 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 Nusa Palapa with a short position of PT Harapan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusa Palapa and PT Harapan.
Diversification Opportunities for Nusa Palapa and PT Harapan
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nusa and HOPE is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nusa Palapa Gemilang and PT Harapan Duta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Harapan Duta and Nusa Palapa 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 Nusa Palapa Gemilang are associated (or correlated) with PT Harapan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Harapan Duta has no effect on the direction of Nusa Palapa i.e., Nusa Palapa and PT Harapan go up and down completely randomly.
Pair Corralation between Nusa Palapa and PT Harapan
Assuming the 90 days trading horizon Nusa Palapa Gemilang is expected to under-perform the PT Harapan. But the stock apears to be less risky and, when comparing its historical volatility, Nusa Palapa Gemilang is 1.24 times less risky than PT Harapan. The stock trades about -0.03 of its potential returns per unit of risk. The PT Harapan Duta is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,000 in PT Harapan Duta on September 1, 2024 and sell it today you would lose (1,500) from holding PT Harapan Duta or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.44% |
| Values | Daily Returns |
Nusa Palapa Gemilang vs. PT Harapan Duta
Performance |
| Timeline |
| Nusa Palapa Gemilang |
| PT Harapan Duta |
Nusa Palapa and PT Harapan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nusa Palapa and PT Harapan
The main advantage of trading using opposite Nusa Palapa and PT Harapan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nusa Palapa position performs unexpectedly, PT Harapan 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 Harapan will offset losses from the drop in PT Harapan's long position.| Nusa Palapa vs. Saraswanti Anugerah Makmur | Nusa Palapa vs. Berkah Beton Sadaya | Nusa Palapa vs. Triputra Agro Persada | Nusa Palapa vs. PT Sunter Lakeside |
| PT Harapan vs. Ladangbaja Murni PT | PT Harapan vs. Berkah Beton Sadaya | PT Harapan vs. Cahayaputra Asa Keramik | PT Harapan vs. Diagnos Laboratorium Utama |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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