Correlation Between Mitrabara Adiperdana and Selamat Sempurna
Can any of the company-specific risk be diversified away by investing in both Mitrabara Adiperdana 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 Mitrabara Adiperdana and Selamat Sempurna 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 Selamat Sempurna Tbk, you can compare the effects of market volatilities on Mitrabara Adiperdana 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 Mitrabara Adiperdana with a short position of Selamat Sempurna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabara Adiperdana and Selamat Sempurna.
Diversification Opportunities for Mitrabara Adiperdana and Selamat Sempurna
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitrabara and Selamat is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabara Adiperdana PT 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 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 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 Mitrabara Adiperdana i.e., Mitrabara Adiperdana and Selamat Sempurna go up and down completely randomly.
Pair Corralation between Mitrabara Adiperdana and Selamat Sempurna
Assuming the 90 days trading horizon Mitrabara Adiperdana PT is expected to under-perform the Selamat Sempurna. But the stock apears to be less risky and, when comparing its historical volatility, Mitrabara Adiperdana PT is 1.11 times less risky than Selamat Sempurna. The stock trades about -0.09 of its potential returns per unit of risk. The Selamat Sempurna Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 136,215 in Selamat Sempurna Tbk on November 19, 2024 and sell it today you would earn a total of 38,785 from holding Selamat Sempurna Tbk or generate 28.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Mitrabara Adiperdana PT vs. Selamat Sempurna Tbk
Performance |
| Timeline |
| Mitrabara Adiperdana |
| Selamat Sempurna Tbk |
Mitrabara Adiperdana and Selamat Sempurna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitrabara Adiperdana and Selamat Sempurna
The main advantage of trading using opposite Mitrabara Adiperdana and Selamat Sempurna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitrabara Adiperdana 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.| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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