Correlation Between Nippon Indosari and Mayora Indah
Can any of the company-specific risk be diversified away by investing in both Nippon Indosari and Mayora Indah 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 Nippon Indosari and Mayora Indah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Indosari Corpindo and Mayora Indah Tbk, you can compare the effects of market volatilities on Nippon Indosari and Mayora Indah 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 Nippon Indosari with a short position of Mayora Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Indosari and Mayora Indah.
Diversification Opportunities for Nippon Indosari and Mayora Indah
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nippon and Mayora is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Indosari Corpindo and Mayora Indah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayora Indah Tbk and Nippon Indosari 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 Nippon Indosari Corpindo are associated (or correlated) with Mayora Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayora Indah Tbk has no effect on the direction of Nippon Indosari i.e., Nippon Indosari and Mayora Indah go up and down completely randomly.
Pair Corralation between Nippon Indosari and Mayora Indah
Assuming the 90 days trading horizon Nippon Indosari Corpindo is expected to under-perform the Mayora Indah. But the stock apears to be less risky and, when comparing its historical volatility, Nippon Indosari Corpindo is 1.14 times less risky than Mayora Indah. The stock trades about -0.01 of its potential returns per unit of risk. The Mayora Indah Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 242,033 in Mayora Indah Tbk on September 2, 2024 and sell it today you would earn a total of 27,967 from holding Mayora Indah Tbk or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Nippon Indosari Corpindo vs. Mayora Indah Tbk
Performance |
| Timeline |
| Nippon Indosari Corpindo |
| Mayora Indah Tbk |
Nippon Indosari and Mayora Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Indosari and Mayora Indah
The main advantage of trading using opposite Nippon Indosari and Mayora Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Indosari position performs unexpectedly, Mayora Indah 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 Mayora Indah will offset losses from the drop in Mayora Indah's long position.| Nippon Indosari vs. Mayora Indah Tbk | Nippon Indosari vs. Ultra Jaya Milk | Nippon Indosari vs. Mitra Adiperkasa Tbk | Nippon Indosari vs. FKS Food Sejahtera |
| Mayora Indah vs. Bank BRISyariah Tbk | Mayora Indah vs. Mitra Pinasthika Mustika | Mayora Indah vs. Jakarta Int Hotels | Mayora Indah vs. Indosterling Technomedia Tbk |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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