Correlation Between Pratama Widya and Nusantara Almazia
Can any of the company-specific risk be diversified away by investing in both Pratama Widya and Nusantara Almazia 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 Pratama Widya and Nusantara Almazia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pratama Widya Tbk and Nusantara Almazia, you can compare the effects of market volatilities on Pratama Widya and Nusantara Almazia 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 Pratama Widya with a short position of Nusantara Almazia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pratama Widya and Nusantara Almazia.
Diversification Opportunities for Pratama Widya and Nusantara Almazia
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pratama and Nusantara is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pratama Widya Tbk and Nusantara Almazia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusantara Almazia and Pratama Widya 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 Pratama Widya Tbk are associated (or correlated) with Nusantara Almazia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusantara Almazia has no effect on the direction of Pratama Widya i.e., Pratama Widya and Nusantara Almazia go up and down completely randomly.
Pair Corralation between Pratama Widya and Nusantara Almazia
Assuming the 90 days trading horizon Pratama Widya Tbk is expected to generate 0.17 times more return on investment than Nusantara Almazia. However, Pratama Widya Tbk is 5.96 times less risky than Nusantara Almazia. It trades about -0.04 of its potential returns per unit of risk. Nusantara Almazia is currently generating about -0.01 per unit of risk. If you would invest 99,500 in Pratama Widya Tbk on September 12, 2024 and sell it today you would lose (11,000) from holding Pratama Widya Tbk or give up 11.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pratama Widya Tbk vs. Nusantara Almazia
Performance |
| Timeline |
| Pratama Widya Tbk |
| Nusantara Almazia |
Pratama Widya and Nusantara Almazia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pratama Widya and Nusantara Almazia
The main advantage of trading using opposite Pratama Widya and Nusantara Almazia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pratama Widya position performs unexpectedly, Nusantara Almazia 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 Nusantara Almazia will offset losses from the drop in Nusantara Almazia's long position.| Pratama Widya vs. Kencana Energi Lestari | Pratama Widya vs. Pelita Samudera Shipping | Pratama Widya vs. Paramita Bangun Sarana | Pratama Widya vs. Dana Brata Luhur |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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