Correlation Between Mitra Keluarga and Transcoal Pacific
Can any of the company-specific risk be diversified away by investing in both Mitra Keluarga and Transcoal Pacific 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 Transcoal Pacific 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 Transcoal Pacific Tbk, you can compare the effects of market volatilities on Mitra Keluarga and Transcoal Pacific 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 Transcoal Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Keluarga and Transcoal Pacific.
Diversification Opportunities for Mitra Keluarga and Transcoal Pacific
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitra and Transcoal is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Keluarga Karyasehat and Transcoal Pacific Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcoal Pacific Tbk 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 Transcoal Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcoal Pacific Tbk has no effect on the direction of Mitra Keluarga i.e., Mitra Keluarga and Transcoal Pacific go up and down completely randomly.
Pair Corralation between Mitra Keluarga and Transcoal Pacific
Assuming the 90 days trading horizon Mitra Keluarga Karyasehat is expected to generate 0.95 times more return on investment than Transcoal Pacific. However, Mitra Keluarga Karyasehat is 1.06 times less risky than Transcoal Pacific. It trades about -0.02 of its potential returns per unit of risk. Transcoal Pacific Tbk is currently generating about -0.02 per unit of risk. If you would invest 272,862 in Mitra Keluarga Karyasehat on November 4, 2024 and sell it today you would lose (29,862) from holding Mitra Keluarga Karyasehat or give up 10.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Keluarga Karyasehat vs. Transcoal Pacific Tbk
Performance |
| Timeline |
| Mitra Keluarga Karyasehat |
| Transcoal Pacific Tbk |
Mitra Keluarga and Transcoal Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Keluarga and Transcoal Pacific
The main advantage of trading using opposite Mitra Keluarga and Transcoal Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Keluarga position performs unexpectedly, Transcoal Pacific 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 Transcoal Pacific will offset losses from the drop in Transcoal Pacific's long position.| Mitra Keluarga vs. Merdeka Copper Gold | Mitra Keluarga vs. Tower Bersama Infrastructure | Mitra Keluarga vs. Erajaya Swasembada Tbk | Mitra Keluarga vs. Surya Citra Media |
| Transcoal Pacific vs. Bank Tabungan Pensiunan | Transcoal Pacific vs. Chandra Asri Petrochemical | Transcoal Pacific vs. Mitra Keluarga Karyasehat | Transcoal Pacific vs. Merdeka Copper Gold |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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