Correlation Between Washington Mutual and Mitra Adiperkasa
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Mitra Adiperkasa 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 Washington Mutual and Mitra Adiperkasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Mutual Investors and Mitra Adiperkasa Tbk, you can compare the effects of market volatilities on Washington Mutual and Mitra Adiperkasa 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 Washington Mutual with a short position of Mitra Adiperkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Mitra Adiperkasa.
Diversification Opportunities for Washington Mutual and Mitra Adiperkasa
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and Mitra is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Mitra Adiperkasa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitra Adiperkasa Tbk and Washington Mutual 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 Washington Mutual Investors are associated (or correlated) with Mitra Adiperkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitra Adiperkasa Tbk has no effect on the direction of Washington Mutual i.e., Washington Mutual and Mitra Adiperkasa go up and down completely randomly.
Pair Corralation between Washington Mutual and Mitra Adiperkasa
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.35 times more return on investment than Mitra Adiperkasa. However, Washington Mutual Investors is 2.83 times less risky than Mitra Adiperkasa. It trades about 0.21 of its potential returns per unit of risk. Mitra Adiperkasa Tbk is currently generating about -0.06 per unit of risk. If you would invest 6,205 in Washington Mutual Investors on October 24, 2024 and sell it today you would earn a total of 173.00 from holding Washington Mutual Investors or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Washington Mutual Investors vs. Mitra Adiperkasa Tbk
Performance |
| Timeline |
| Washington Mutual |
| Mitra Adiperkasa Tbk |
Washington Mutual and Mitra Adiperkasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Mitra Adiperkasa
The main advantage of trading using opposite Washington Mutual and Mitra Adiperkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Mitra Adiperkasa 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 Mitra Adiperkasa will offset losses from the drop in Mitra Adiperkasa's long position.| Washington Mutual vs. Alphacentric Symmetry Strategy | Washington Mutual vs. Barings Emerging Markets | Washington Mutual vs. Western Assets Emerging | Washington Mutual vs. Catalystmillburn Hedge Strategy |
| Mitra Adiperkasa vs. Ramayana Lestari Sentosa | Mitra Adiperkasa vs. Ace Hardware Indonesia | Mitra Adiperkasa vs. Summarecon Agung Tbk | Mitra Adiperkasa vs. Media Nusantara Citra |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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