Correlation Between Pelita Samudera and Nusantara Almazia
Can any of the company-specific risk be diversified away by investing in both Pelita Samudera and Nusantara Almazia 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 Pelita Samudera and Nusantara Almazia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pelita Samudera Shipping and Nusantara Almazia, you can compare the effects of market volatilities on Pelita Samudera and Nusantara Almazia 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 Pelita Samudera with a short position of Nusantara Almazia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelita Samudera and Nusantara Almazia.
Diversification Opportunities for Pelita Samudera and Nusantara Almazia
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pelita and Nusantara is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pelita Samudera Shipping and Nusantara Almazia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusantara Almazia and Pelita Samudera 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 Pelita Samudera Shipping are associated (or correlated) with Nusantara Almazia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusantara Almazia has no effect on the direction of Pelita Samudera i.e., Pelita Samudera and Nusantara Almazia go up and down completely randomly.
Pair Corralation between Pelita Samudera and Nusantara Almazia
Assuming the 90 days trading horizon Pelita Samudera Shipping is expected to under-perform the Nusantara Almazia. But the stock apears to be less risky and, when comparing its historical volatility, Pelita Samudera Shipping is 7.62 times less risky than Nusantara Almazia. The stock trades about -0.13 of its potential returns per unit of risk. The Nusantara Almazia is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8,000 in Nusantara Almazia on September 25, 2024 and sell it today you would lose (1,300) from holding Nusantara Almazia or give up 16.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Pelita Samudera Shipping vs. Nusantara Almazia
Performance |
Timeline |
Pelita Samudera Shipping |
Nusantara Almazia |
Pelita Samudera and Nusantara Almazia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pelita Samudera and Nusantara Almazia
The main advantage of trading using opposite Pelita Samudera and Nusantara Almazia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pelita Samudera position performs unexpectedly, Nusantara Almazia 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 Nusantara Almazia will offset losses from the drop in Nusantara Almazia's long position.Pelita Samudera vs. Petrosea Tbk | Pelita Samudera vs. Soechi Lines Tbk | Pelita Samudera vs. Wintermar Offshore Marine | Pelita Samudera vs. Indika Energy Tbk |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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