Correlation Between PT Indonesia and Protech Mitra
Can any of the company-specific risk be diversified away by investing in both PT Indonesia and Protech Mitra 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 PT Indonesia and Protech Mitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indonesia Kendaraan and Protech Mitra Perkasa, you can compare the effects of market volatilities on PT Indonesia and Protech Mitra 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 PT Indonesia with a short position of Protech Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indonesia and Protech Mitra.
Diversification Opportunities for PT Indonesia and Protech Mitra
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPCC and Protech is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding PT Indonesia Kendaraan and Protech Mitra Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protech Mitra Perkasa and PT Indonesia 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 PT Indonesia Kendaraan are associated (or correlated) with Protech Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protech Mitra Perkasa has no effect on the direction of PT Indonesia i.e., PT Indonesia and Protech Mitra go up and down completely randomly.
Pair Corralation between PT Indonesia and Protech Mitra
Assuming the 90 days trading horizon PT Indonesia is expected to generate 1.5 times less return on investment than Protech Mitra. But when comparing it to its historical volatility, PT Indonesia Kendaraan is 3.03 times less risky than Protech Mitra. It trades about 0.05 of its potential returns per unit of risk. Protech Mitra Perkasa is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13,400 in Protech Mitra Perkasa on September 14, 2024 and sell it today you would earn a total of 900.00 from holding Protech Mitra Perkasa or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indonesia Kendaraan vs. Protech Mitra Perkasa
Performance |
| Timeline |
| PT Indonesia Kendaraan |
| Protech Mitra Perkasa |
PT Indonesia and Protech Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indonesia and Protech Mitra
The main advantage of trading using opposite PT Indonesia and Protech Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indonesia position performs unexpectedly, Protech Mitra 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 Protech Mitra will offset losses from the drop in Protech Mitra's long position.| PT Indonesia vs. Jasa Armada Indonesia | PT Indonesia vs. Cikarang Listrindo Tbk | PT Indonesia vs. Mitra Pinasthika Mustika | PT Indonesia vs. Wijaya Karya Bangunan |
| Protech Mitra vs. PT Indonesia Kendaraan | Protech Mitra vs. Surya Toto Indonesia | Protech Mitra vs. Mitra Pinasthika Mustika | Protech Mitra vs. Integra Indocabinet 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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