Correlation Between Mitrabara Adiperdana and Prodia Widyahusada
Can any of the company-specific risk be diversified away by investing in both Mitrabara Adiperdana and Prodia Widyahusada 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 Prodia Widyahusada 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 Prodia Widyahusada Tbk, you can compare the effects of market volatilities on Mitrabara Adiperdana and Prodia Widyahusada 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 Prodia Widyahusada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabara Adiperdana and Prodia Widyahusada.
Diversification Opportunities for Mitrabara Adiperdana and Prodia Widyahusada
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mitrabara and Prodia is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabara Adiperdana PT and Prodia Widyahusada Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodia Widyahusada 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 Prodia Widyahusada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodia Widyahusada Tbk has no effect on the direction of Mitrabara Adiperdana i.e., Mitrabara Adiperdana and Prodia Widyahusada go up and down completely randomly.
Pair Corralation between Mitrabara Adiperdana and Prodia Widyahusada
Assuming the 90 days trading horizon Mitrabara Adiperdana PT is expected to under-perform the Prodia Widyahusada. In addition to that, Mitrabara Adiperdana is 1.08 times more volatile than Prodia Widyahusada Tbk. It trades about -0.09 of its total potential returns per unit of risk. Prodia Widyahusada Tbk is currently generating about -0.07 per unit of volatility. If you would invest 532,484 in Prodia Widyahusada Tbk on November 19, 2024 and sell it today you would lose (279,484) from holding Prodia Widyahusada Tbk or give up 52.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitrabara Adiperdana PT vs. Prodia Widyahusada Tbk
Performance |
| Timeline |
| Mitrabara Adiperdana |
| Prodia Widyahusada Tbk |
Mitrabara Adiperdana and Prodia Widyahusada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitrabara Adiperdana and Prodia Widyahusada
The main advantage of trading using opposite Mitrabara Adiperdana and Prodia Widyahusada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitrabara Adiperdana position performs unexpectedly, Prodia Widyahusada 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 Prodia Widyahusada will offset losses from the drop in Prodia Widyahusada's long position.| Mitrabara Adiperdana vs. Baramulti Suksessarana Tbk | Mitrabara Adiperdana vs. Samindo Resources Tbk | Mitrabara Adiperdana vs. Hexindo Adiperkasa Tbk | Mitrabara Adiperdana vs. Mitra Pinasthika Mustika |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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