Correlation Between Mahkota Group and Palma Serasih
Can any of the company-specific risk be diversified away by investing in both Mahkota Group and Palma Serasih 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 Mahkota Group and Palma Serasih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mahkota Group Tbk and Palma Serasih PT, you can compare the effects of market volatilities on Mahkota Group and Palma Serasih 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 Mahkota Group with a short position of Palma Serasih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahkota Group and Palma Serasih.
Diversification Opportunities for Mahkota Group and Palma Serasih
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mahkota and Palma is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mahkota Group Tbk and Palma Serasih PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palma Serasih PT and Mahkota Group 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 Mahkota Group Tbk are associated (or correlated) with Palma Serasih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palma Serasih PT has no effect on the direction of Mahkota Group i.e., Mahkota Group and Palma Serasih go up and down completely randomly.
Pair Corralation between Mahkota Group and Palma Serasih
Assuming the 90 days trading horizon Mahkota Group is expected to generate 3.37 times less return on investment than Palma Serasih. In addition to that, Mahkota Group is 1.07 times more volatile than Palma Serasih PT. It trades about 0.01 of its total potential returns per unit of risk. Palma Serasih PT is currently generating about 0.04 per unit of volatility. If you would invest 13,453 in Palma Serasih PT on August 28, 2024 and sell it today you would earn a total of 2,947 from holding Palma Serasih PT or generate 21.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Mahkota Group Tbk vs. Palma Serasih PT
Performance |
| Timeline |
| Mahkota Group Tbk |
| Palma Serasih PT |
Mahkota Group and Palma Serasih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mahkota Group and Palma Serasih
The main advantage of trading using opposite Mahkota Group and Palma Serasih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahkota Group position performs unexpectedly, Palma Serasih 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 Palma Serasih will offset losses from the drop in Palma Serasih's long position.The idea behind Mahkota Group Tbk and Palma Serasih PT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Palma Serasih vs. Mahkota Group Tbk | Palma Serasih vs. Provident Agro Tbk | Palma Serasih vs. Putra Mandiri Jembar | Palma Serasih vs. Cisadane Sawit Raya |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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