Correlation Between Mahaka Media and Pertamina Geothermal
Can any of the company-specific risk be diversified away by investing in both Mahaka Media and Pertamina Geothermal 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 Pertamina Geothermal 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 Pertamina Geothermal Energy, you can compare the effects of market volatilities on Mahaka Media and Pertamina Geothermal 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 Pertamina Geothermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahaka Media and Pertamina Geothermal.
Diversification Opportunities for Mahaka Media and Pertamina Geothermal
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mahaka and Pertamina is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mahaka Media Tbk and Pertamina Geothermal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pertamina Geothermal 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 Pertamina Geothermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pertamina Geothermal has no effect on the direction of Mahaka Media i.e., Mahaka Media and Pertamina Geothermal go up and down completely randomly.
Pair Corralation between Mahaka Media and Pertamina Geothermal
Assuming the 90 days trading horizon Mahaka Media Tbk is expected to generate 1.38 times more return on investment than Pertamina Geothermal. However, Mahaka Media is 1.38 times more volatile than Pertamina Geothermal Energy. It trades about 0.45 of its potential returns per unit of risk. Pertamina Geothermal Energy is currently generating about -0.22 per unit of risk. If you would invest 2,500 in Mahaka Media Tbk on October 23, 2024 and sell it today you would earn a total of 300.00 from holding Mahaka Media Tbk or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mahaka Media Tbk vs. Pertamina Geothermal Energy
Performance |
| Timeline |
| Mahaka Media Tbk |
| Pertamina Geothermal |
Mahaka Media and Pertamina Geothermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mahaka Media and Pertamina Geothermal
The main advantage of trading using opposite Mahaka Media and Pertamina Geothermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahaka Media position performs unexpectedly, Pertamina Geothermal 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 Pertamina Geothermal will offset losses from the drop in Pertamina Geothermal'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 |
| Pertamina Geothermal vs. Metrodata Electronics Tbk | Pertamina Geothermal vs. Garuda Metalindo Tbk | Pertamina Geothermal vs. Indorama Synthetics Tbk | Pertamina Geothermal vs. First Media 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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