Correlation Between Mitra Adiperkasa and Matahari Putra
Can any of the company-specific risk be diversified away by investing in both Mitra Adiperkasa and Matahari Putra 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 Mitra Adiperkasa and Matahari Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitra Adiperkasa Tbk and Matahari Putra Prima, you can compare the effects of market volatilities on Mitra Adiperkasa and Matahari Putra 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 Mitra Adiperkasa with a short position of Matahari Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Adiperkasa and Matahari Putra.
Diversification Opportunities for Mitra Adiperkasa and Matahari Putra
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitra and Matahari is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Adiperkasa Tbk and Matahari Putra Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matahari Putra Prima and Mitra Adiperkasa 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 Mitra Adiperkasa Tbk are associated (or correlated) with Matahari Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matahari Putra Prima has no effect on the direction of Mitra Adiperkasa i.e., Mitra Adiperkasa and Matahari Putra go up and down completely randomly.
Pair Corralation between Mitra Adiperkasa and Matahari Putra
Assuming the 90 days trading horizon Mitra Adiperkasa Tbk is expected to under-perform the Matahari Putra. But the stock apears to be less risky and, when comparing its historical volatility, Mitra Adiperkasa Tbk is 1.67 times less risky than Matahari Putra. The stock trades about -0.05 of its potential returns per unit of risk. The Matahari Putra Prima is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Matahari Putra Prima on November 5, 2024 and sell it today you would earn a total of 1,300 from holding Matahari Putra Prima or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Adiperkasa Tbk vs. Matahari Putra Prima
Performance |
| Timeline |
| Mitra Adiperkasa Tbk |
| Matahari Putra Prima |
Mitra Adiperkasa and Matahari Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Adiperkasa and Matahari Putra
The main advantage of trading using opposite Mitra Adiperkasa and Matahari Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Adiperkasa position performs unexpectedly, Matahari Putra 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 Matahari Putra will offset losses from the drop in Matahari Putra's long position.| Mitra Adiperkasa vs. Ramayana Lestari Sentosa | Mitra Adiperkasa vs. Ace Hardware Indonesia | Mitra Adiperkasa vs. Summarecon Agung Tbk | Mitra Adiperkasa vs. Media Nusantara Citra |
| Matahari Putra vs. Multipolar Tbk | Matahari Putra vs. Ramayana Lestari Sentosa | Matahari Putra vs. Lippo Karawaci Tbk | Matahari Putra vs. Mitra Adiperkasa 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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