Correlation Between Mahaka Media and Centratama Telekomunikasi
Can any of the company-specific risk be diversified away by investing in both Mahaka Media and Centratama Telekomunikasi 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 Mahaka Media and Centratama Telekomunikasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mahaka Media Tbk and Centratama Telekomunikasi Ind, you can compare the effects of market volatilities on Mahaka Media and Centratama Telekomunikasi 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 Mahaka Media with a short position of Centratama Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahaka Media and Centratama Telekomunikasi.
Diversification Opportunities for Mahaka Media and Centratama Telekomunikasi
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mahaka and Centratama is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mahaka Media Tbk and Centratama Telekomunikasi Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centratama Telekomunikasi and Mahaka Media 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 Mahaka Media Tbk are associated (or correlated) with Centratama Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centratama Telekomunikasi has no effect on the direction of Mahaka Media i.e., Mahaka Media and Centratama Telekomunikasi go up and down completely randomly.
Pair Corralation between Mahaka Media and Centratama Telekomunikasi
Assuming the 90 days trading horizon Mahaka Media Tbk is expected to generate 1.32 times more return on investment than Centratama Telekomunikasi. However, Mahaka Media is 1.32 times more volatile than Centratama Telekomunikasi Ind. It trades about -0.13 of its potential returns per unit of risk. Centratama Telekomunikasi Ind is currently generating about -0.26 per unit of risk. If you would invest 2,900 in Mahaka Media Tbk on September 1, 2024 and sell it today you would lose (300.00) from holding Mahaka Media Tbk or give up 10.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mahaka Media Tbk vs. Centratama Telekomunikasi Ind
Performance |
| Timeline |
| Mahaka Media Tbk |
| Centratama Telekomunikasi |
Mahaka Media and Centratama Telekomunikasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mahaka Media and Centratama Telekomunikasi
The main advantage of trading using opposite Mahaka Media and Centratama Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahaka Media position performs unexpectedly, Centratama Telekomunikasi 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 Centratama Telekomunikasi will offset losses from the drop in Centratama Telekomunikasi's long position.| Mahaka Media vs. Akbar Indomakmur Stimec | Mahaka Media vs. Bayu Buana Tbk | Mahaka Media vs. Centratama Telekomunikasi Ind | Mahaka Media vs. Fortune Indonesia Tbk |
| Centratama Telekomunikasi vs. Indosat Tbk | Centratama Telekomunikasi vs. XL Axiata Tbk | Centratama Telekomunikasi vs. Energi Mega Persada | Centratama Telekomunikasi vs. Bakrie Brothers Tbk |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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