Correlation Between Nusa Raya and Pratama Widya
Can any of the company-specific risk be diversified away by investing in both Nusa Raya and Pratama Widya 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 Pratama Widya 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 Pratama Widya Tbk, you can compare the effects of market volatilities on Nusa Raya and Pratama Widya 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 Pratama Widya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusa Raya and Pratama Widya.
Diversification Opportunities for Nusa Raya and Pratama Widya
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nusa and Pratama is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nusa Raya Cipta and Pratama Widya Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pratama Widya 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 Pratama Widya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pratama Widya Tbk has no effect on the direction of Nusa Raya i.e., Nusa Raya and Pratama Widya go up and down completely randomly.
Pair Corralation between Nusa Raya and Pratama Widya
Assuming the 90 days trading horizon Nusa Raya Cipta is expected to under-perform the Pratama Widya. But the stock apears to be less risky and, when comparing its historical volatility, Nusa Raya Cipta is 1.09 times less risky than Pratama Widya. The stock trades about -0.17 of its potential returns per unit of risk. The Pratama Widya Tbk is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 85,500 in Pratama Widya Tbk on November 3, 2024 and sell it today you would lose (1,000.00) from holding Pratama Widya Tbk or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Nusa Raya Cipta vs. Pratama Widya Tbk
Performance |
| Timeline |
| Nusa Raya Cipta |
| Pratama Widya Tbk |
Nusa Raya and Pratama Widya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nusa Raya and Pratama Widya
The main advantage of trading using opposite Nusa Raya and Pratama Widya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nusa Raya position performs unexpectedly, Pratama Widya 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 Pratama Widya will offset losses from the drop in Pratama Widya's long position.| Nusa Raya vs. Total Bangun Persada | Nusa Raya vs. Surya Semesta Internusa | Nusa Raya vs. Acset Indonusa Tbk | Nusa Raya vs. Mitra Pinasthika Mustika |
| Pratama Widya vs. Kencana Energi Lestari | Pratama Widya vs. Pelita Samudera Shipping | Pratama Widya vs. Paramita Bangun Sarana | Pratama Widya vs. Dana Brata Luhur |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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