Correlation Between MD Pictures and Indoritel Makmur
Can any of the company-specific risk be diversified away by investing in both MD Pictures and Indoritel Makmur 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 MD Pictures and Indoritel Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MD Pictures Tbk and Indoritel Makmur Internasional, you can compare the effects of market volatilities on MD Pictures and Indoritel Makmur 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 MD Pictures with a short position of Indoritel Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of MD Pictures and Indoritel Makmur.
Diversification Opportunities for MD Pictures and Indoritel Makmur
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FILM and Indoritel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding MD Pictures Tbk and Indoritel Makmur Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indoritel Makmur Int and MD Pictures 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 MD Pictures Tbk are associated (or correlated) with Indoritel Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indoritel Makmur Int has no effect on the direction of MD Pictures i.e., MD Pictures and Indoritel Makmur go up and down completely randomly.
Pair Corralation between MD Pictures and Indoritel Makmur
Assuming the 90 days trading horizon MD Pictures Tbk is expected to generate 6.03 times more return on investment than Indoritel Makmur. However, MD Pictures is 6.03 times more volatile than Indoritel Makmur Internasional. It trades about 0.03 of its potential returns per unit of risk. Indoritel Makmur Internasional is currently generating about 0.02 per unit of risk. If you would invest 367,000 in MD Pictures Tbk on September 12, 2024 and sell it today you would earn a total of 3,000 from holding MD Pictures Tbk or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MD Pictures Tbk vs. Indoritel Makmur Internasional
Performance |
| Timeline |
| MD Pictures Tbk |
| Indoritel Makmur Int |
MD Pictures and Indoritel Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MD Pictures and Indoritel Makmur
The main advantage of trading using opposite MD Pictures and Indoritel Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MD Pictures position performs unexpectedly, Indoritel Makmur 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 Indoritel Makmur will offset losses from the drop in Indoritel Makmur's long position.| MD Pictures vs. Mnc Land Tbk | MD Pictures vs. MNC Vision Networks | MD Pictures vs. Link Net Tbk | MD Pictures vs. Medikaloka Hermina PT |
| Indoritel Makmur vs. Mnc Land Tbk | Indoritel Makmur vs. MNC Vision Networks | Indoritel Makmur vs. MD Pictures Tbk | Indoritel Makmur vs. Link Net 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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