Correlation Between Mitra Keluarga and Royal Prima
Can any of the company-specific risk be diversified away by investing in both Mitra Keluarga and Royal Prima 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 Mitra Keluarga and Royal Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitra Keluarga Karyasehat and Royal Prima PT, you can compare the effects of market volatilities on Mitra Keluarga and Royal Prima 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 Mitra Keluarga with a short position of Royal Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Keluarga and Royal Prima.
Diversification Opportunities for Mitra Keluarga and Royal Prima
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitra and Royal is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Keluarga Karyasehat and Royal Prima PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Prima PT and Mitra Keluarga 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 Mitra Keluarga Karyasehat are associated (or correlated) with Royal Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Prima PT has no effect on the direction of Mitra Keluarga i.e., Mitra Keluarga and Royal Prima go up and down completely randomly.
Pair Corralation between Mitra Keluarga and Royal Prima
Assuming the 90 days trading horizon Mitra Keluarga Karyasehat is expected to under-perform the Royal Prima. But the stock apears to be less risky and, when comparing its historical volatility, Mitra Keluarga Karyasehat is 1.03 times less risky than Royal Prima. The stock trades about -0.23 of its potential returns per unit of risk. The Royal Prima PT is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 6,500 in Royal Prima PT on August 24, 2024 and sell it today you would lose (500.00) from holding Royal Prima PT or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Keluarga Karyasehat vs. Royal Prima PT
Performance |
| Timeline |
| Mitra Keluarga Karyasehat |
| Royal Prima PT |
Mitra Keluarga and Royal Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Keluarga and Royal Prima
The main advantage of trading using opposite Mitra Keluarga and Royal Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Keluarga position performs unexpectedly, Royal Prima 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 Royal Prima will offset losses from the drop in Royal Prima's long position.| Mitra Keluarga vs. Astra Graphia Tbk | Mitra Keluarga vs. Hexindo Adiperkasa Tbk | Mitra Keluarga vs. Lautan Luas Tbk | Mitra Keluarga vs. Citra Marga Nusaphala |
| Royal Prima vs. Astra Graphia Tbk | Royal Prima vs. Hexindo Adiperkasa Tbk | Royal Prima vs. Lautan Luas Tbk | Royal Prima vs. Citra Marga Nusaphala |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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