Correlation Between Nusa Raya and Total Bangun
Can any of the company-specific risk be diversified away by investing in both Nusa Raya and Total Bangun 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 Nusa Raya and Total Bangun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nusa Raya Cipta and Total Bangun Persada, you can compare the effects of market volatilities on Nusa Raya and Total Bangun 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 Nusa Raya with a short position of Total Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusa Raya and Total Bangun.
Diversification Opportunities for Nusa Raya and Total Bangun
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nusa and Total is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nusa Raya Cipta and Total Bangun Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Bangun Persada and Nusa Raya 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 Nusa Raya Cipta are associated (or correlated) with Total Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Bangun Persada has no effect on the direction of Nusa Raya i.e., Nusa Raya and Total Bangun go up and down completely randomly.
Pair Corralation between Nusa Raya and Total Bangun
Assuming the 90 days trading horizon Nusa Raya Cipta is expected to generate 0.92 times more return on investment than Total Bangun. However, Nusa Raya Cipta is 1.09 times less risky than Total Bangun. It trades about -0.17 of its potential returns per unit of risk. Total Bangun Persada is currently generating about -0.21 per unit of risk. If you would invest 42,800 in Nusa Raya Cipta on October 27, 2024 and sell it today you would lose (8,200) from holding Nusa Raya Cipta or give up 19.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nusa Raya Cipta vs. Total Bangun Persada
Performance |
Timeline |
Nusa Raya Cipta |
Total Bangun Persada |
Nusa Raya and Total Bangun Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nusa Raya and Total Bangun
The main advantage of trading using opposite Nusa Raya and Total Bangun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nusa Raya position performs unexpectedly, Total Bangun 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 Total Bangun will offset losses from the drop in Total Bangun's long position.Nusa Raya vs. Total Bangun Persada | Nusa Raya vs. Surya Semesta Internusa | Nusa Raya vs. Acset Indonusa Tbk | Nusa Raya vs. Mitra Pinasthika Mustika |
Total Bangun vs. Kawasan Industri Jababeka | Total Bangun vs. Adhi Karya Persero | Total Bangun vs. Ciputra Development Tbk | Total Bangun vs. Solusi Bangun Indonesia |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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