Correlation Between Map Boga and Mark Dynamics
Can any of the company-specific risk be diversified away by investing in both Map Boga and Mark Dynamics 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 Map Boga and Mark Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Map Boga Adiperkasa and Mark Dynamics Indonesia, you can compare the effects of market volatilities on Map Boga and Mark Dynamics 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 Map Boga with a short position of Mark Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Map Boga and Mark Dynamics.
Diversification Opportunities for Map Boga and Mark Dynamics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Map and Mark is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Map Boga Adiperkasa and Mark Dynamics Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mark Dynamics Indonesia and Map Boga 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 Map Boga Adiperkasa are associated (or correlated) with Mark Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mark Dynamics Indonesia has no effect on the direction of Map Boga i.e., Map Boga and Mark Dynamics go up and down completely randomly.
Pair Corralation between Map Boga and Mark Dynamics
Assuming the 90 days trading horizon Map Boga Adiperkasa is expected to under-perform the Mark Dynamics. But the stock apears to be less risky and, when comparing its historical volatility, Map Boga Adiperkasa is 1.37 times less risky than Mark Dynamics. The stock trades about -0.26 of its potential returns per unit of risk. The Mark Dynamics Indonesia is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 95,161 in Mark Dynamics Indonesia on August 28, 2024 and sell it today you would earn a total of 8,339 from holding Mark Dynamics Indonesia or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Map Boga Adiperkasa vs. Mark Dynamics Indonesia
Performance |
| Timeline |
| Map Boga Adiperkasa |
| Mark Dynamics Indonesia |
Map Boga and Mark Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Map Boga and Mark Dynamics
The main advantage of trading using opposite Map Boga and Mark Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Map Boga position performs unexpectedly, Mark Dynamics 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 Mark Dynamics will offset losses from the drop in Mark Dynamics' long position.| Map Boga vs. MAP Aktif Adiperkasa | Map Boga vs. Fast Food Indonesia | Map Boga vs. PT Sarimelati Kencana | Map Boga vs. Prodia Widyahusada 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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