Correlation Between Bank Negara and Mitra Pinasthika
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Mitra Pinasthika 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 Bank Negara and Mitra Pinasthika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Negara Indonesia and Mitra Pinasthika Mustika, you can compare the effects of market volatilities on Bank Negara and Mitra Pinasthika 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 Bank Negara with a short position of Mitra Pinasthika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Mitra Pinasthika.
Diversification Opportunities for Bank Negara and Mitra Pinasthika
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Mitra is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Mitra Pinasthika Mustika in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitra Pinasthika Mustika and Bank Negara 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 Bank Negara Indonesia are associated (or correlated) with Mitra Pinasthika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitra Pinasthika Mustika has no effect on the direction of Bank Negara i.e., Bank Negara and Mitra Pinasthika go up and down completely randomly.
Pair Corralation between Bank Negara and Mitra Pinasthika
Assuming the 90 days trading horizon Bank Negara Indonesia is expected to under-perform the Mitra Pinasthika. In addition to that, Bank Negara is 3.89 times more volatile than Mitra Pinasthika Mustika. It trades about -0.1 of its total potential returns per unit of risk. Mitra Pinasthika Mustika is currently generating about -0.25 per unit of volatility. If you would invest 101,500 in Mitra Pinasthika Mustika on September 2, 2024 and sell it today you would lose (2,500) from holding Mitra Pinasthika Mustika or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Mitra Pinasthika Mustika
Performance |
| Timeline |
| Bank Negara Indonesia |
| Mitra Pinasthika Mustika |
Bank Negara and Mitra Pinasthika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Mitra Pinasthika
The main advantage of trading using opposite Bank Negara and Mitra Pinasthika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Mitra Pinasthika 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 Pinasthika will offset losses from the drop in Mitra Pinasthika's long position.| Bank Negara vs. Ace Hardware Indonesia | Bank Negara vs. Merdeka Copper Gold | Bank Negara vs. Mitra Pinasthika Mustika | Bank Negara vs. Jakarta Int Hotels |
| Mitra Pinasthika vs. Saratoga Investama Sedaya | Mitra Pinasthika vs. Puradelta Lestari PT | Mitra Pinasthika vs. Cikarang Listrindo Tbk | Mitra Pinasthika vs. Erajaya Swasembada 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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