Correlation Between Matahari Department and Berlian Laju
Can any of the company-specific risk be diversified away by investing in both Matahari Department and Berlian Laju 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 Matahari Department and Berlian Laju into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matahari Department Store and Berlian Laju Tanker, you can compare the effects of market volatilities on Matahari Department and Berlian Laju 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 Matahari Department with a short position of Berlian Laju. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matahari Department and Berlian Laju.
Diversification Opportunities for Matahari Department and Berlian Laju
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Matahari and Berlian is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Matahari Department Store and Berlian Laju Tanker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berlian Laju Tanker and Matahari Department 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 Matahari Department Store are associated (or correlated) with Berlian Laju. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berlian Laju Tanker has no effect on the direction of Matahari Department i.e., Matahari Department and Berlian Laju go up and down completely randomly.
Pair Corralation between Matahari Department and Berlian Laju
Assuming the 90 days trading horizon Matahari Department Store is expected to generate 0.34 times more return on investment than Berlian Laju. However, Matahari Department Store is 2.97 times less risky than Berlian Laju. It trades about -0.23 of its potential returns per unit of risk. Berlian Laju Tanker is currently generating about -0.14 per unit of risk. If you would invest 151,500 in Matahari Department Store on September 2, 2024 and sell it today you would lose (10,000) from holding Matahari Department Store or give up 6.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matahari Department Store vs. Berlian Laju Tanker
Performance |
| Timeline |
| Matahari Department Store |
| Berlian Laju Tanker |
Matahari Department and Berlian Laju Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matahari Department and Berlian Laju
The main advantage of trading using opposite Matahari Department and Berlian Laju positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matahari Department position performs unexpectedly, Berlian Laju 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 Berlian Laju will offset losses from the drop in Berlian Laju's long position.| Matahari Department vs. Japfa Comfeed Indonesia | Matahari Department vs. Charoen Pokphand Indonesia | Matahari Department vs. Erajaya Swasembada Tbk | Matahari Department vs. Indofood Cbp Sukses |
| Berlian Laju vs. Matahari Department Store | Berlian Laju vs. Multi Medika Internasional | Berlian Laju vs. Visi Media Asia | Berlian Laju vs. Bayan Resources 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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