Correlation Between Mark Dynamics and Selamat Sempurna
Can any of the company-specific risk be diversified away by investing in both Mark Dynamics and Selamat Sempurna 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 Mark Dynamics and Selamat Sempurna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mark Dynamics Indonesia and Selamat Sempurna Tbk, you can compare the effects of market volatilities on Mark Dynamics and Selamat Sempurna 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 Mark Dynamics with a short position of Selamat Sempurna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mark Dynamics and Selamat Sempurna.
Diversification Opportunities for Mark Dynamics and Selamat Sempurna
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mark and Selamat is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mark Dynamics Indonesia and Selamat Sempurna Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selamat Sempurna Tbk and Mark Dynamics 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 Mark Dynamics Indonesia are associated (or correlated) with Selamat Sempurna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selamat Sempurna Tbk has no effect on the direction of Mark Dynamics i.e., Mark Dynamics and Selamat Sempurna go up and down completely randomly.
Pair Corralation between Mark Dynamics and Selamat Sempurna
Assuming the 90 days trading horizon Mark Dynamics Indonesia is expected to under-perform the Selamat Sempurna. In addition to that, Mark Dynamics is 1.88 times more volatile than Selamat Sempurna Tbk. It trades about -0.1 of its total potential returns per unit of risk. Selamat Sempurna Tbk is currently generating about -0.16 per unit of volatility. If you would invest 194,324 in Selamat Sempurna Tbk on August 25, 2024 and sell it today you would lose (8,824) from holding Selamat Sempurna Tbk or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mark Dynamics Indonesia vs. Selamat Sempurna Tbk
Performance |
| Timeline |
| Mark Dynamics Indonesia |
| Selamat Sempurna Tbk |
Mark Dynamics and Selamat Sempurna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mark Dynamics and Selamat Sempurna
The main advantage of trading using opposite Mark Dynamics and Selamat Sempurna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mark Dynamics position performs unexpectedly, Selamat Sempurna 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 Selamat Sempurna will offset losses from the drop in Selamat Sempurna's long position.| Mark Dynamics vs. Samudera Indonesia Tbk | Mark Dynamics vs. Rukun Raharja Tbk | Mark Dynamics vs. PT Temas Tbk | Mark Dynamics vs. Weha Transportasi Indonesia |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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