Correlation Between Nusa Raya and PP Presisi
Can any of the company-specific risk be diversified away by investing in both Nusa Raya and PP Presisi 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 Raya and PP Presisi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nusa Raya Cipta and PP Presisi Tbk, you can compare the effects of market volatilities on Nusa Raya and PP Presisi 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 Raya with a short position of PP Presisi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusa Raya and PP Presisi.
Diversification Opportunities for Nusa Raya and PP Presisi
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nusa and PPRE is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nusa Raya Cipta and PP Presisi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PP Presisi Tbk and Nusa Raya 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 Raya Cipta are associated (or correlated) with PP Presisi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PP Presisi Tbk has no effect on the direction of Nusa Raya i.e., Nusa Raya and PP Presisi go up and down completely randomly.
Pair Corralation between Nusa Raya and PP Presisi
Assuming the 90 days trading horizon Nusa Raya is expected to generate 18.31 times less return on investment than PP Presisi. But when comparing it to its historical volatility, Nusa Raya Cipta is 4.38 times less risky than PP Presisi. It trades about 0.0 of its potential returns per unit of risk. PP Presisi Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,600 in PP Presisi Tbk on October 23, 2024 and sell it today you would earn a total of 0.00 from holding PP Presisi Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nusa Raya Cipta vs. PP Presisi Tbk
Performance |
| Timeline |
| Nusa Raya Cipta |
| PP Presisi Tbk |
Nusa Raya and PP Presisi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nusa Raya and PP Presisi
The main advantage of trading using opposite Nusa Raya and PP Presisi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nusa Raya position performs unexpectedly, PP Presisi 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 PP Presisi will offset losses from the drop in PP Presisi's long position.| Nusa Raya vs. Arita Prima Indonesia | Nusa Raya vs. Betonjaya Manunggal Tbk | Nusa Raya vs. Alakasa Industrindo Tbk | Nusa Raya vs. Alkindo Naratama Tbk |
| PP Presisi vs. Wijaya Karya Bangunan | PP Presisi vs. PP Properti Tbk | PP Presisi vs. Wijaya Karya Beton | PP Presisi vs. Soechi Lines 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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