Correlation Between Repower Asia and Nusantara Almazia
Can any of the company-specific risk be diversified away by investing in both Repower Asia 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 Repower Asia and Nusantara Almazia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repower Asia Indonesia and Nusantara Almazia, you can compare the effects of market volatilities on Repower Asia 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 Repower Asia with a short position of Nusantara Almazia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repower Asia and Nusantara Almazia.
Diversification Opportunities for Repower Asia and Nusantara Almazia
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Repower and Nusantara is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Repower Asia Indonesia and Nusantara Almazia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusantara Almazia and Repower Asia 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 Repower Asia Indonesia 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 Repower Asia i.e., Repower Asia and Nusantara Almazia go up and down completely randomly.
Pair Corralation between Repower Asia and Nusantara Almazia
Assuming the 90 days trading horizon Repower Asia Indonesia is expected to generate 1.17 times more return on investment than Nusantara Almazia. However, Repower Asia is 1.17 times more volatile than Nusantara Almazia. It trades about 0.04 of its potential returns per unit of risk. Nusantara Almazia is currently generating about -0.03 per unit of risk. If you would invest 900.00 in Repower Asia Indonesia on November 29, 2024 and sell it today you would earn a total of 0.00 from holding Repower Asia Indonesia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Repower Asia Indonesia vs. Nusantara Almazia
Performance |
| Timeline |
| Repower Asia Indonesia |
| Nusantara Almazia |
Repower Asia and Nusantara Almazia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repower Asia and Nusantara Almazia
The main advantage of trading using opposite Repower Asia and Nusantara Almazia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repower Asia 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.| Repower Asia vs. Ciptadana Asset Management | Repower Asia vs. Bekasi Fajar Industrial | Repower Asia vs. Indosterling Technomedia Tbk | Repower Asia vs. First Media Tbk |
| Nusantara Almazia vs. Bima Sakti Pertiwi | Nusantara Almazia vs. DMS Propertindo Tbk | Nusantara Almazia vs. Repower Asia Indonesia | Nusantara Almazia vs. Pollux Properti Indonesia |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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