Correlation Between Nusantara Infrastructure and Intanwijaya Internasional

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

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

Diversification Opportunities for Nusantara Infrastructure and Intanwijaya Internasional

0.0

Correlation Coefficient

Nusantara Infrastructure  Intanwijaya Internasional

Pay attention - limited upside

The 3 months correlation between Nusantara and Intanwijaya is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nusantara Infrastructure Tbk and Intanwijaya Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intanwijaya Internasional and Nusantara Infrastructure 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 Infrastructure Tbk are associated (or correlated) with Intanwijaya Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intanwijaya Internasional has no effect on the direction of Nusantara Infrastructure i.e., Nusantara Infrastructure and Intanwijaya Internasional go up and down completely randomly.

Pair Corralation between Nusantara Infrastructure and Intanwijaya Internasional

Assuming the 90 days trading horizon Nusantara Infrastructure Tbk is expected to generate 1.86 times more return on investment than Intanwijaya Internasional. However, Nusantara Infrastructure is 1.86 times more volatile than Intanwijaya Internasional Tbk. It trades about 0.06 of its potential returns per unit of risk. Intanwijaya Internasional Tbk is currently generating about 0.0 per unit of risk. If you would invest  11,800  in Nusantara Infrastructure Tbk on September 4, 2024 and sell it today you would earn a total of  12,000  from holding Nusantara Infrastructure Tbk or generate 101.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.58%
Values	Daily Returns

Nusantara Infrastructure Tbk  vs.  Intanwijaya Internasional Tbk

Nusantara Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

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

Intanwijaya Internasional

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intanwijaya Internasional Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Intanwijaya Internasional 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 Infrastructure and Intanwijaya Internasional

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

The idea behind Nusantara Infrastructure Tbk and Intanwijaya Internasional Tbk 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.