Correlation Between Lojas Renner and PT Mitra
Can any of the company-specific risk be diversified away by investing in both Lojas Renner and PT 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 Lojas Renner and PT Mitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lojas Renner SA and PT Mitra Adiperkasa, you can compare the effects of market volatilities on Lojas Renner and PT 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 Lojas Renner with a short position of PT Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lojas Renner and PT Mitra.
Diversification Opportunities for Lojas Renner and PT Mitra
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lojas and PMDKF is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lojas Renner SA and PT Mitra Adiperkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Mitra Adiperkasa and Lojas Renner 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 Lojas Renner SA are associated (or correlated) with PT Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Mitra Adiperkasa has no effect on the direction of Lojas Renner i.e., Lojas Renner and PT Mitra go up and down completely randomly.
Pair Corralation between Lojas Renner and PT Mitra
If you would invest 11.00 in PT Mitra Adiperkasa on November 2, 2024 and sell it today you would earn a total of 0.00 from holding PT Mitra Adiperkasa or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lojas Renner SA vs. PT Mitra Adiperkasa
Performance |
| Timeline |
| Lojas Renner SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PT Mitra Adiperkasa |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lojas Renner and PT Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lojas Renner and PT Mitra
The main advantage of trading using opposite Lojas Renner and PT Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lojas Renner position performs unexpectedly, PT 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 PT Mitra will offset losses from the drop in PT Mitra's long position.The idea behind Lojas Renner SA and PT Mitra Adiperkasa pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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