Correlation Between Media Nusantara and FormFactor
Can any of the company-specific risk be diversified away by investing in both Media Nusantara and FormFactor 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 Media Nusantara and FormFactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media Nusantara Citra and FormFactor, you can compare the effects of market volatilities on Media Nusantara and FormFactor 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 Media Nusantara with a short position of FormFactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Nusantara and FormFactor.
Diversification Opportunities for Media Nusantara and FormFactor
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Media and FormFactor is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Media Nusantara Citra and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and Media Nusantara 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 Media Nusantara Citra are associated (or correlated) with FormFactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormFactor has no effect on the direction of Media Nusantara i.e., Media Nusantara and FormFactor go up and down completely randomly.
Pair Corralation between Media Nusantara and FormFactor
Assuming the 90 days horizon Media Nusantara Citra is expected to generate 0.18 times more return on investment than FormFactor. However, Media Nusantara Citra is 5.48 times less risky than FormFactor. It trades about -0.09 of its potential returns per unit of risk. FormFactor is currently generating about -0.04 per unit of risk. If you would invest 203.00 in Media Nusantara Citra on September 3, 2024 and sell it today you would lose (15.00) from holding Media Nusantara Citra or give up 7.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Media Nusantara Citra vs. FormFactor
Performance |
| Timeline |
| Media Nusantara Citra |
| FormFactor |
Media Nusantara and FormFactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Nusantara and FormFactor
The main advantage of trading using opposite Media Nusantara and FormFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Nusantara position performs unexpectedly, FormFactor 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 FormFactor will offset losses from the drop in FormFactor's long position.| Media Nusantara vs. Kontoor Brands | Media Nusantara vs. Arrow Financial | Media Nusantara vs. Univest Pennsylvania | Media Nusantara vs. KeyCorp |
| FormFactor vs. Silicon Laboratories | FormFactor vs. Diodes Incorporated | FormFactor vs. MACOM Technology Solutions | FormFactor vs. Amkor Technology |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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