Correlation Between Akr Corporindo and Midi Utama
Can any of the company-specific risk be diversified away by investing in both Akr Corporindo and Midi Utama 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 Akr Corporindo and Midi Utama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akr Corporindo Tbk and Midi Utama Indonesia, you can compare the effects of market volatilities on Akr Corporindo and Midi Utama 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 Akr Corporindo with a short position of Midi Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akr Corporindo and Midi Utama.
Diversification Opportunities for Akr Corporindo and Midi Utama
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Akr and Midi is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Akr Corporindo Tbk and Midi Utama Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midi Utama Indonesia and Akr Corporindo 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 Akr Corporindo Tbk are associated (or correlated) with Midi Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midi Utama Indonesia has no effect on the direction of Akr Corporindo i.e., Akr Corporindo and Midi Utama go up and down completely randomly.
Pair Corralation between Akr Corporindo and Midi Utama
Assuming the 90 days trading horizon Akr Corporindo Tbk is expected to generate 1.68 times more return on investment than Midi Utama. However, Akr Corporindo is 1.68 times more volatile than Midi Utama Indonesia. It trades about -0.17 of its potential returns per unit of risk. Midi Utama Indonesia is currently generating about -0.35 per unit of risk. If you would invest 135,000 in Akr Corporindo Tbk on September 1, 2024 and sell it today you would lose (12,000) from holding Akr Corporindo Tbk or give up 8.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Akr Corporindo Tbk vs. Midi Utama Indonesia
Performance |
| Timeline |
| Akr Corporindo Tbk |
| Midi Utama Indonesia |
Akr Corporindo and Midi Utama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akr Corporindo and Midi Utama
The main advantage of trading using opposite Akr Corporindo and Midi Utama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akr Corporindo position performs unexpectedly, Midi Utama 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 Midi Utama will offset losses from the drop in Midi Utama's long position.| Akr Corporindo vs. Charoen Pokphand Indonesia | Akr Corporindo vs. Indocement Tunggal Prakarsa | Akr Corporindo vs. Bumi Serpong Damai | Akr Corporindo vs. Jasa Marga Tbk |
| Midi Utama vs. Sumber Alfaria Trijaya | Midi Utama vs. Hero Supermarket Tbk | Midi Utama vs. Supra Boga Lestari | Midi Utama vs. Multi Indocitra 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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