Correlation Between Nusantara Almazia and Singaraja Putra

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

By analyzing existing cross correlation between Nusantara Almazia and Singaraja Putra, you can compare the effects of market volatilities on Nusantara Almazia and Singaraja Putra 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 Nusantara Almazia with a short position of Singaraja Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusantara Almazia and Singaraja Putra.

Diversification Opportunities for Nusantara Almazia and Singaraja Putra

-0.01

Correlation Coefficient

Nusantara Almazia  Singaraja Putra

Good diversification

The 3 months correlation between Nusantara and Singaraja is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nusantara Almazia and Singaraja Putra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singaraja Putra and Nusantara Almazia 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 Nusantara Almazia are associated (or correlated) with Singaraja Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singaraja Putra has no effect on the direction of Nusantara Almazia i.e., Nusantara Almazia and Singaraja Putra go up and down completely randomly.

Pair Corralation between Nusantara Almazia and Singaraja Putra

Assuming the 90 days trading horizon Nusantara Almazia is expected to under-perform the Singaraja Putra. But the stock apears to be less risky and, when comparing its historical volatility, Nusantara Almazia is 1.02 times less risky than Singaraja Putra. The stock trades about -0.01 of its potential returns per unit of risk. The Singaraja Putra is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  246,000  in Singaraja Putra on September 19, 2024 and sell it today you would earn a total of  242,000  from holding Singaraja Putra or generate 98.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nusantara Almazia  vs.  Singaraja Putra

Nusantara Almazia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Singaraja Putra

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singaraja Putra are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Singaraja Putra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nusantara Almazia and Singaraja Putra

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

The idea behind Nusantara Almazia and Singaraja Putra 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.