Correlation Between Trimegah Karya and Nusantara Voucher

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

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

Diversification Opportunities for Trimegah Karya and Nusantara Voucher

-0.29

Correlation Coefficient

Trimegah Karya  Nusantara Voucher

Very good diversification

The 3 months correlation between Trimegah and Nusantara is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Trimegah Karya Pratama and Nusantara Voucher Distribution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusantara Voucher and Trimegah Karya 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 Trimegah Karya Pratama are associated (or correlated) with Nusantara Voucher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusantara Voucher has no effect on the direction of Trimegah Karya i.e., Trimegah Karya and Nusantara Voucher go up and down completely randomly.

Pair Corralation between Trimegah Karya and Nusantara Voucher

Assuming the 90 days trading horizon Trimegah Karya Pratama is expected to under-perform the Nusantara Voucher. But the stock apears to be less risky and, when comparing its historical volatility, Trimegah Karya Pratama is 2.1 times less risky than Nusantara Voucher. The stock trades about 0.0 of its potential returns per unit of risk. The Nusantara Voucher Distribution is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,800  in Nusantara Voucher Distribution on September 1, 2024 and sell it today you would earn a total of  7,300  from holding Nusantara Voucher Distribution or generate 74.49% return on investment over 90 days.

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

Trimegah Karya Pratama  vs.  Nusantara Voucher Distribution

Trimegah Karya Pratama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trimegah Karya Pratama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Nusantara Voucher

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nusantara Voucher Distribution are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Nusantara Voucher disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trimegah Karya and Nusantara Voucher

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

The idea behind Trimegah Karya Pratama and Nusantara Voucher Distribution 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.