Correlation Between Nasdaq and PT Sunter

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Can any of the company-specific risk be diversified away by investing in both Nasdaq and PT Sunter 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 PT Sunter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and PT Sunter Lakeside, you can compare the effects of market volatilities on Nasdaq and PT Sunter 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 PT Sunter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and PT Sunter.

Diversification Opportunities for Nasdaq and PT Sunter

NasdaqSNLKDiversified AwayNasdaqSNLKDiversified Away100%
0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Nasdaq and SNLK is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and PT Sunter Lakeside in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sunter Lakeside 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 PT Sunter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sunter Lakeside has no effect on the direction of Nasdaq i.e., Nasdaq and PT Sunter go up and down completely randomly.

Pair Corralation between Nasdaq and PT Sunter

Given the investment horizon of 90 days Nasdaq is expected to generate 4.12 times less return on investment than PT Sunter. But when comparing it to its historical volatility, Nasdaq Inc is 3.0 times less risky than PT Sunter. It trades about 0.15 of its potential returns per unit of risk. PT Sunter Lakeside is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  68,500  in PT Sunter Lakeside on September 16, 2024 and sell it today you would earn a total of  29,500  from holding PT Sunter Lakeside or generate 43.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.46%
ValuesDaily Returns

Nasdaq Inc  vs.  PT Sunter Lakeside

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 010203040
JavaScript chart by amCharts 3.21.15NDAQ SNLK
       Timeline  
Nasdaq Inc 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec72747678808284
PT Sunter Lakeside 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in PT Sunter Lakeside are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Sunter disclosed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec6507007508008509009501,000

Nasdaq and PT Sunter Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.0-2.26-1.53-0.79-0.050.751.552.353.153.95 0.10.20.30.4
JavaScript chart by amCharts 3.21.15NDAQ SNLK
       Returns  

Pair Trading with Nasdaq and PT Sunter

The main advantage of trading using opposite Nasdaq and PT Sunter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, PT Sunter 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 PT Sunter will offset losses from the drop in PT Sunter's long position.
The idea behind Nasdaq Inc and PT Sunter Lakeside 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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