Correlation Between Nusantara Almazia and Dana Brata

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

By analyzing existing cross correlation between Nusantara Almazia and Dana Brata Luhur, you can compare the effects of market volatilities on Nusantara Almazia and Dana Brata 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 Dana Brata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusantara Almazia and Dana Brata.

Diversification Opportunities for Nusantara Almazia and Dana Brata

-0.13

Correlation Coefficient

Nusantara Almazia  Dana Brata

Good diversification

The 3 months correlation between Nusantara and Dana is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nusantara Almazia and Dana Brata Luhur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Brata Luhur 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 Dana Brata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Brata Luhur has no effect on the direction of Nusantara Almazia i.e., Nusantara Almazia and Dana Brata go up and down completely randomly.

Pair Corralation between Nusantara Almazia and Dana Brata

Assuming the 90 days trading horizon Nusantara Almazia is expected to generate 6.98 times more return on investment than Dana Brata. However, Nusantara Almazia is 6.98 times more volatile than Dana Brata Luhur. It trades about -0.01 of its potential returns per unit of risk. Dana Brata Luhur is currently generating about -0.08 per unit of risk. If you would invest  8,100  in Nusantara Almazia on September 19, 2024 and sell it today you would lose (1,200) from holding Nusantara Almazia or give up 14.81% of portfolio value over 90 days.

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

Nusantara Almazia  vs.  Dana Brata Luhur

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.

Dana Brata Luhur

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dana Brata Luhur has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Dana Brata 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 Nusantara Almazia and Dana Brata

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

The idea behind Nusantara Almazia and Dana Brata Luhur 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.