Correlation Between Mandala Multifinance and Lima Dua
Can any of the company-specific risk be diversified away by investing in both Mandala Multifinance and Lima Dua 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 Mandala Multifinance and Lima Dua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mandala Multifinance Tbk and Lima Dua Lima, you can compare the effects of market volatilities on Mandala Multifinance and Lima Dua 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 Mandala Multifinance with a short position of Lima Dua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mandala Multifinance and Lima Dua.
Diversification Opportunities for Mandala Multifinance and Lima Dua
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mandala and Lima is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mandala Multifinance Tbk and Lima Dua Lima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lima Dua Lima and Mandala Multifinance 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 Mandala Multifinance Tbk are associated (or correlated) with Lima Dua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lima Dua Lima has no effect on the direction of Mandala Multifinance i.e., Mandala Multifinance and Lima Dua go up and down completely randomly.
Pair Corralation between Mandala Multifinance and Lima Dua
Assuming the 90 days trading horizon Mandala Multifinance Tbk is expected to generate 0.78 times more return on investment than Lima Dua. However, Mandala Multifinance Tbk is 1.28 times less risky than Lima Dua. It trades about -0.04 of its potential returns per unit of risk. Lima Dua Lima is currently generating about -0.2 per unit of risk. If you would invest 340,000 in Mandala Multifinance Tbk on November 27, 2024 and sell it today you would lose (11,000) from holding Mandala Multifinance Tbk or give up 3.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mandala Multifinance Tbk vs. Lima Dua Lima
Performance |
| Timeline |
| Mandala Multifinance Tbk |
| Lima Dua Lima |
Mandala Multifinance and Lima Dua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mandala Multifinance and Lima Dua
The main advantage of trading using opposite Mandala Multifinance and Lima Dua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mandala Multifinance position performs unexpectedly, Lima Dua 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 Lima Dua will offset losses from the drop in Lima Dua's long position.| Mandala Multifinance vs. Paninvest Tbk | Mandala Multifinance vs. Maskapai Reasuransi Indonesia | Mandala Multifinance vs. Panin Sekuritas Tbk | Mandala Multifinance vs. Wahana Ottomitra Multiartha |
| Lima Dua vs. Imago Mulia Persada | Lima Dua vs. PT Sunter Lakeside | Lima Dua vs. Damai Sejahtera Abadi | Lima Dua vs. Panca Anugrah Wisesa |
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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