Correlation Between Pembangunan Perumahan and Media Nusantara
Can any of the company-specific risk be diversified away by investing in both Pembangunan Perumahan and Media Nusantara 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 Pembangunan Perumahan and Media Nusantara into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembangunan Perumahan PT and Media Nusantara Citra, you can compare the effects of market volatilities on Pembangunan Perumahan and Media Nusantara 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 Pembangunan Perumahan with a short position of Media Nusantara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembangunan Perumahan and Media Nusantara.
Diversification Opportunities for Pembangunan Perumahan and Media Nusantara
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pembangunan and Media is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pembangunan Perumahan PT and Media Nusantara Citra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Nusantara Citra and Pembangunan Perumahan 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 Pembangunan Perumahan PT are associated (or correlated) with Media Nusantara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Nusantara Citra has no effect on the direction of Pembangunan Perumahan i.e., Pembangunan Perumahan and Media Nusantara go up and down completely randomly.
Pair Corralation between Pembangunan Perumahan and Media Nusantara
Assuming the 90 days trading horizon Pembangunan Perumahan PT is expected to generate 1.41 times more return on investment than Media Nusantara. However, Pembangunan Perumahan is 1.41 times more volatile than Media Nusantara Citra. It trades about -0.03 of its potential returns per unit of risk. Media Nusantara Citra is currently generating about -0.07 per unit of risk. If you would invest 80,500 in Pembangunan Perumahan PT on August 28, 2024 and sell it today you would lose (40,100) from holding Pembangunan Perumahan PT or give up 49.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Pembangunan Perumahan PT vs. Media Nusantara Citra
Performance |
| Timeline |
| Pembangunan Perumahan |
| Media Nusantara Citra |
Pembangunan Perumahan and Media Nusantara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembangunan Perumahan and Media Nusantara
The main advantage of trading using opposite Pembangunan Perumahan and Media Nusantara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembangunan Perumahan position performs unexpectedly, Media Nusantara 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 Media Nusantara will offset losses from the drop in Media Nusantara's long position.The idea behind Pembangunan Perumahan PT and Media Nusantara Citra pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Media Nusantara vs. Mnc Land Tbk | Media Nusantara vs. MNC Vision Networks | Media Nusantara vs. Medikaloka Hermina PT |
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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