Correlation Between Nusa Palapa and PT Sunter
Can any of the company-specific risk be diversified away by investing in both Nusa Palapa and PT Sunter 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 Sunter 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 Sunter Lakeside, you can compare the effects of market volatilities on Nusa Palapa and PT Sunter 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 Sunter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusa Palapa and PT Sunter.
Diversification Opportunities for Nusa Palapa and PT Sunter
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nusa and SNLK is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nusa Palapa Gemilang and PT Sunter Lakeside in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sunter Lakeside 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 Sunter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sunter Lakeside has no effect on the direction of Nusa Palapa i.e., Nusa Palapa and PT Sunter go up and down completely randomly.
Pair Corralation between Nusa Palapa and PT Sunter
Assuming the 90 days trading horizon Nusa Palapa Gemilang is expected to under-perform the PT Sunter. In addition to that, Nusa Palapa is 1.01 times more volatile than PT Sunter Lakeside. It trades about -0.03 of its total potential returns per unit of risk. PT Sunter Lakeside is currently generating about 0.06 per unit of volatility. If you would invest 51,500 in PT Sunter Lakeside on September 1, 2024 and sell it today you would earn a total of 17,000 from holding PT Sunter Lakeside or generate 33.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nusa Palapa Gemilang vs. PT Sunter Lakeside
Performance |
| Timeline |
| Nusa Palapa Gemilang |
| PT Sunter Lakeside |
Nusa Palapa and PT Sunter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nusa Palapa and PT Sunter
The main advantage of trading using opposite Nusa Palapa and PT Sunter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nusa Palapa position performs unexpectedly, PT Sunter 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 Sunter will offset losses from the drop in PT Sunter'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 Sunter vs. Gaya Abadi Sempurna | PT Sunter vs. Damai Sejahtera Abadi | PT Sunter vs. Red Planet Indonesia | PT Sunter vs. PAM Mineral Tbk |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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