Correlation Between Alakasa Industrindo and Mahaka Media
Can any of the company-specific risk be diversified away by investing in both Alakasa Industrindo and Mahaka Media 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 Alakasa Industrindo and Mahaka Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alakasa Industrindo Tbk and Mahaka Media Tbk, you can compare the effects of market volatilities on Alakasa Industrindo and Mahaka Media 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 Alakasa Industrindo with a short position of Mahaka Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alakasa Industrindo and Mahaka Media.
Diversification Opportunities for Alakasa Industrindo and Mahaka Media
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alakasa and Mahaka is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alakasa Industrindo Tbk and Mahaka Media Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahaka Media Tbk and Alakasa Industrindo 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 Alakasa Industrindo Tbk are associated (or correlated) with Mahaka Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahaka Media Tbk has no effect on the direction of Alakasa Industrindo i.e., Alakasa Industrindo and Mahaka Media go up and down completely randomly.
Pair Corralation between Alakasa Industrindo and Mahaka Media
Assuming the 90 days trading horizon Alakasa Industrindo Tbk is expected to generate 1.31 times more return on investment than Mahaka Media. However, Alakasa Industrindo is 1.31 times more volatile than Mahaka Media Tbk. It trades about 0.05 of its potential returns per unit of risk. Mahaka Media Tbk is currently generating about 0.01 per unit of risk. If you would invest 31,800 in Alakasa Industrindo Tbk on August 29, 2024 and sell it today you would earn a total of 6,000 from holding Alakasa Industrindo Tbk or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alakasa Industrindo Tbk vs. Mahaka Media Tbk
Performance |
| Timeline |
| Alakasa Industrindo Tbk |
| Mahaka Media Tbk |
Alakasa Industrindo and Mahaka Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alakasa Industrindo and Mahaka Media
The main advantage of trading using opposite Alakasa Industrindo and Mahaka Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alakasa Industrindo position performs unexpectedly, Mahaka Media 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 Mahaka Media will offset losses from the drop in Mahaka Media's long position.| Alakasa Industrindo vs. Argha Karya Prima | Alakasa Industrindo vs. Alumindo Light Metal | Alakasa Industrindo vs. Asiaplast Industries Tbk | Alakasa Industrindo vs. Akbar Indomakmur Stimec |
| Mahaka Media vs. Akbar Indomakmur Stimec | Mahaka Media vs. Bayu Buana Tbk | Mahaka Media vs. Centratama Telekomunikasi Ind | Mahaka Media vs. Fortune Indonesia 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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