Correlation Between Nasdaq and Cahayaputra Asa

Can any of the company-specific risk be diversified away by investing in both Nasdaq and Cahayaputra Asa 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 Nasdaq and Cahayaputra Asa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq Inc and Cahayaputra Asa Keramik, you can compare the effects of market volatilities on Nasdaq and Cahayaputra Asa 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 Nasdaq with a short position of Cahayaputra Asa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Cahayaputra Asa.

Diversification Opportunities for Nasdaq and Cahayaputra Asa

-0.44

Correlation Coefficient

Nasdaq  Cahayaputra Asa

Very good diversification

The 3 months correlation between Nasdaq and Cahayaputra is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Cahayaputra Asa Keramik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cahayaputra Asa Keramik and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Cahayaputra Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cahayaputra Asa Keramik has no effect on the direction of Nasdaq i.e., Nasdaq and Cahayaputra Asa go up and down completely randomly.

Pair Corralation between Nasdaq and Cahayaputra Asa

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.5 times more return on investment than Cahayaputra Asa. However, Nasdaq Inc is 1.98 times less risky than Cahayaputra Asa. It trades about 0.08 of its potential returns per unit of risk. Cahayaputra Asa Keramik is currently generating about -0.03 per unit of risk. If you would invest  7,379  in Nasdaq Inc on September 22, 2024 and sell it today you would earn a total of  359.00  from holding Nasdaq Inc or generate 4.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Nasdaq Inc  vs.  Cahayaputra Asa Keramik

Nasdaq Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Cahayaputra Asa Keramik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cahayaputra Asa Keramik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Cahayaputra Asa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Nasdaq and Cahayaputra Asa

The main advantage of trading using opposite Nasdaq and Cahayaputra Asa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Cahayaputra Asa 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 Cahayaputra Asa will offset losses from the drop in Cahayaputra Asa's long position.

The idea behind Nasdaq Inc and Cahayaputra Asa Keramik 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.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.