Correlation Between Martina Berto and Mandom Indonesia
Can any of the company-specific risk be diversified away by investing in both Martina Berto and Mandom Indonesia 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 Martina Berto and Mandom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martina Berto Tbk and Mandom Indonesia Tbk, you can compare the effects of market volatilities on Martina Berto and Mandom Indonesia 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 Martina Berto with a short position of Mandom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martina Berto and Mandom Indonesia.
Diversification Opportunities for Martina Berto and Mandom Indonesia
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Martina and Mandom is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Martina Berto Tbk and Mandom Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mandom Indonesia Tbk and Martina Berto 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 Martina Berto Tbk are associated (or correlated) with Mandom Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mandom Indonesia Tbk has no effect on the direction of Martina Berto i.e., Martina Berto and Mandom Indonesia go up and down completely randomly.
Pair Corralation between Martina Berto and Mandom Indonesia
Assuming the 90 days trading horizon Martina Berto Tbk is expected to under-perform the Mandom Indonesia. But the stock apears to be less risky and, when comparing its historical volatility, Martina Berto Tbk is 1.2 times less risky than Mandom Indonesia. The stock trades about -0.17 of its potential returns per unit of risk. The Mandom Indonesia Tbk is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 238,000 in Mandom Indonesia Tbk on September 3, 2024 and sell it today you would lose (15,000) from holding Mandom Indonesia Tbk or give up 6.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martina Berto Tbk vs. Mandom Indonesia Tbk
Performance |
| Timeline |
| Martina Berto Tbk |
| Mandom Indonesia Tbk |
Martina Berto and Mandom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martina Berto and Mandom Indonesia
The main advantage of trading using opposite Martina Berto and Mandom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martina Berto position performs unexpectedly, Mandom Indonesia 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 Mandom Indonesia will offset losses from the drop in Mandom Indonesia's long position.| Martina Berto vs. Mustika Ratu Tbk | Martina Berto vs. Langgeng Makmur Industri | Martina Berto vs. Kedaung Indah Can | Martina Berto vs. Mandom Indonesia Tbk |
| Mandom Indonesia vs. Astra International Tbk | Mandom Indonesia vs. Unilever Indonesia Tbk | Mandom Indonesia vs. Telkom Indonesia Tbk | Mandom Indonesia vs. Bank Mandiri Persero |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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