Correlation Between Indo Kordsa and Mahaka Media
Can any of the company-specific risk be diversified away by investing in both Indo Kordsa 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 Indo Kordsa and Mahaka Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Kordsa Tbk and Mahaka Media Tbk, you can compare the effects of market volatilities on Indo Kordsa 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 Indo Kordsa with a short position of Mahaka Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Kordsa and Mahaka Media.
Diversification Opportunities for Indo Kordsa and Mahaka Media
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indo and Mahaka is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Indo Kordsa 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 Indo Kordsa 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 Indo Kordsa 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 Indo Kordsa i.e., Indo Kordsa and Mahaka Media go up and down completely randomly.
Pair Corralation between Indo Kordsa and Mahaka Media
Assuming the 90 days trading horizon Indo Kordsa Tbk is expected to generate 0.99 times more return on investment than Mahaka Media. However, Indo Kordsa Tbk is 1.01 times less risky than Mahaka Media. It trades about 0.05 of its potential returns per unit of risk. Mahaka Media Tbk is currently generating about -0.13 per unit of risk. If you would invest 581,538 in Indo Kordsa Tbk on September 1, 2024 and sell it today you would earn a total of 15,962 from holding Indo Kordsa Tbk or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Kordsa Tbk vs. Mahaka Media Tbk
Performance |
| Timeline |
| Indo Kordsa Tbk |
| Mahaka Media Tbk |
Indo Kordsa and Mahaka Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Kordsa and Mahaka Media
The main advantage of trading using opposite Indo Kordsa and Mahaka Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Kordsa 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.| Indo Kordsa vs. Goodyear Indonesia Tbk | Indo Kordsa vs. Sepatu Bata Tbk | Indo Kordsa vs. Indospring Tbk | Indo Kordsa vs. Ever Shine Textile |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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