Correlation Between Wave Entertainment and Nusasiri Public

Can any of the company-specific risk be diversified away by investing in both Wave Entertainment and Nusasiri Public 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 Wave Entertainment and Nusasiri Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Wave Entertainment and Nusasiri Public

0.74

Correlation Coefficient

Wave Entertainment  Nusasiri Public

Poor diversification

The 3 months correlation between Wave and Nusasiri is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wave Entertainment Public and Nusasiri Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusasiri Public and Wave Entertainment 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 Wave Entertainment Public are associated (or correlated) with Nusasiri Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusasiri Public has no effect on the direction of Wave Entertainment i.e., Wave Entertainment and Nusasiri Public go up and down completely randomly.

Pair Corralation between Wave Entertainment and Nusasiri Public

Assuming the 90 days trading horizon Wave Entertainment Public is expected to generate 1.33 times more return on investment than Nusasiri Public. However, Wave Entertainment is 1.33 times more volatile than Nusasiri Public. It trades about 0.03 of its potential returns per unit of risk. Nusasiri Public is currently generating about -0.25 per unit of risk. If you would invest  7.00  in Wave Entertainment Public on December 4, 2024 and sell it today you would earn a total of  0.00  from holding Wave Entertainment Public or generate 0.0% return on investment over 90 days.

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

Wave Entertainment Public  vs.  Nusasiri Public

Wave Entertainment Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wave Entertainment Public 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Nusasiri Public

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Wave Entertainment and Nusasiri Public

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

The idea behind Wave Entertainment Public and Nusasiri Public 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.