Correlation Between Mitrabara Adiperdana and Mitra Adiperkasa
Can any of the company-specific risk be diversified away by investing in both Mitrabara Adiperdana and Mitra Adiperkasa 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 Mitrabara Adiperdana and Mitra Adiperkasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitrabara Adiperdana PT and Mitra Adiperkasa Tbk, you can compare the effects of market volatilities on Mitrabara Adiperdana and Mitra Adiperkasa 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 Mitrabara Adiperdana with a short position of Mitra Adiperkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabara Adiperdana and Mitra Adiperkasa.
Diversification Opportunities for Mitrabara Adiperdana and Mitra Adiperkasa
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mitrabara and Mitra is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabara Adiperdana PT and Mitra Adiperkasa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitra Adiperkasa Tbk and Mitrabara Adiperdana 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 Mitrabara Adiperdana PT are associated (or correlated) with Mitra Adiperkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitra Adiperkasa Tbk has no effect on the direction of Mitrabara Adiperdana i.e., Mitrabara Adiperdana and Mitra Adiperkasa go up and down completely randomly.
Pair Corralation between Mitrabara Adiperdana and Mitra Adiperkasa
Assuming the 90 days trading horizon Mitrabara Adiperdana PT is expected to under-perform the Mitra Adiperkasa. But the stock apears to be less risky and, when comparing its historical volatility, Mitrabara Adiperdana PT is 1.32 times less risky than Mitra Adiperkasa. The stock trades about -0.06 of its potential returns per unit of risk. The Mitra Adiperkasa Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 139,357 in Mitra Adiperkasa Tbk on September 19, 2024 and sell it today you would lose (357.00) from holding Mitra Adiperkasa Tbk or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Mitrabara Adiperdana PT vs. Mitra Adiperkasa Tbk
Performance |
| Timeline |
| Mitrabara Adiperdana |
| Mitra Adiperkasa Tbk |
Mitrabara Adiperdana and Mitra Adiperkasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitrabara Adiperdana and Mitra Adiperkasa
The main advantage of trading using opposite Mitrabara Adiperdana and Mitra Adiperkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitrabara Adiperdana position performs unexpectedly, Mitra Adiperkasa 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 Mitra Adiperkasa will offset losses from the drop in Mitra Adiperkasa's long position.| Mitrabara Adiperdana vs. Harum Energy Tbk | Mitrabara Adiperdana vs. Delta Dunia Makmur | Mitrabara Adiperdana vs. Adi Sarana Armada | Mitrabara Adiperdana vs. Elang Mahkota Teknologi |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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