Correlation Between Singaraja Putra and Nusantara Almazia

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

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

Diversification Opportunities for Singaraja Putra and Nusantara Almazia

-0.03

Correlation Coefficient

Singaraja Putra  Nusantara Almazia

Good diversification

The 3 months correlation between Singaraja and Nusantara is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Singaraja Putra and Nusantara Almazia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusantara Almazia and Singaraja Putra 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 Singaraja Putra 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 Singaraja Putra i.e., Singaraja Putra and Nusantara Almazia go up and down completely randomly.

Pair Corralation between Singaraja Putra and Nusantara Almazia

Assuming the 90 days trading horizon Singaraja Putra is expected to generate 1.0 times more return on investment than Nusantara Almazia. However, Singaraja Putra is 1.0 times more volatile than Nusantara Almazia. It trades about 0.22 of its potential returns per unit of risk. Nusantara Almazia is currently generating about 0.0 per unit of risk. If you would invest  222,000  in Singaraja Putra on September 20, 2024 and sell it today you would earn a total of  266,000  from holding Singaraja Putra or generate 119.82% return on investment over 90 days.

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

Singaraja Putra  vs.  Nusantara Almazia

Singaraja Putra

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Singaraja Putra are ranked lower than 17 (%) 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.

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.

Pair Trading with Singaraja Putra and Nusantara Almazia

The main advantage of trading using opposite Singaraja Putra and Nusantara Almazia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singaraja Putra 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.

The idea behind Singaraja Putra and Nusantara Almazia 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.