Correlation Between Nusantara Almazia and Meta Epsi

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

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

Diversification Opportunities for Nusantara Almazia and Meta Epsi

-0.22

Correlation Coefficient

Nusantara Almazia  Meta Epsi

Very good diversification

The 3 months correlation between Nusantara and Meta is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nusantara Almazia and Meta Epsi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Epsi Tbk 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 Meta Epsi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Epsi Tbk has no effect on the direction of Nusantara Almazia i.e., Nusantara Almazia and Meta Epsi go up and down completely randomly.

Pair Corralation between Nusantara Almazia and Meta Epsi

Assuming the 90 days trading horizon Nusantara Almazia is expected to under-perform the Meta Epsi. But the stock apears to be less risky and, when comparing its historical volatility, Nusantara Almazia is 1.22 times less risky than Meta Epsi. The stock trades about -0.08 of its potential returns per unit of risk. The Meta Epsi Tbk is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,200  in Meta Epsi Tbk on December 31, 2024 and sell it today you would lose (100.00) from holding Meta Epsi Tbk or give up 8.33% 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.  Meta Epsi Tbk

Nusantara Almazia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nusantara Almazia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Meta Epsi Tbk

Risk-Adjusted Performance

Weak

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

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

The idea behind Nusantara Almazia and Meta Epsi 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.