Correlation Between Mahaka Media and Dharma Polimetal
Can any of the company-specific risk be diversified away by investing in both Mahaka Media and Dharma Polimetal 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 Dharma Polimetal 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 Dharma Polimetal Tbk, you can compare the effects of market volatilities on Mahaka Media and Dharma Polimetal 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 Dharma Polimetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahaka Media and Dharma Polimetal.
Diversification Opportunities for Mahaka Media and Dharma Polimetal
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mahaka and Dharma is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mahaka Media Tbk and Dharma Polimetal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dharma Polimetal Tbk 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 Dharma Polimetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dharma Polimetal Tbk has no effect on the direction of Mahaka Media i.e., Mahaka Media and Dharma Polimetal go up and down completely randomly.
Pair Corralation between Mahaka Media and Dharma Polimetal
Assuming the 90 days trading horizon Mahaka Media Tbk is expected to generate 2.38 times more return on investment than Dharma Polimetal. However, Mahaka Media is 2.38 times more volatile than Dharma Polimetal Tbk. It trades about -0.07 of its potential returns per unit of risk. Dharma Polimetal Tbk is currently generating about -0.22 per unit of risk. If you would invest 3,000 in Mahaka Media Tbk on August 30, 2024 and sell it today you would lose (200.00) from holding Mahaka Media Tbk or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mahaka Media Tbk vs. Dharma Polimetal Tbk
Performance |
| Timeline |
| Mahaka Media Tbk |
| Dharma Polimetal Tbk |
Mahaka Media and Dharma Polimetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mahaka Media and Dharma Polimetal
The main advantage of trading using opposite Mahaka Media and Dharma Polimetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahaka Media position performs unexpectedly, Dharma Polimetal 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 Dharma Polimetal will offset losses from the drop in Dharma Polimetal'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 |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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