Correlation Between Menthobi Karyatama and Mahkota Group
Can any of the company-specific risk be diversified away by investing in both Menthobi Karyatama and Mahkota Group 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 Menthobi Karyatama and Mahkota Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Menthobi Karyatama Raya and Mahkota Group Tbk, you can compare the effects of market volatilities on Menthobi Karyatama and Mahkota Group 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 Menthobi Karyatama with a short position of Mahkota Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Menthobi Karyatama and Mahkota Group.
Diversification Opportunities for Menthobi Karyatama and Mahkota Group
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Menthobi and Mahkota is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Menthobi Karyatama Raya and Mahkota Group Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahkota Group Tbk and Menthobi Karyatama 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 Menthobi Karyatama Raya are associated (or correlated) with Mahkota Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahkota Group Tbk has no effect on the direction of Menthobi Karyatama i.e., Menthobi Karyatama and Mahkota Group go up and down completely randomly.
Pair Corralation between Menthobi Karyatama and Mahkota Group
Assuming the 90 days trading horizon Menthobi Karyatama Raya is expected to under-perform the Mahkota Group. But the stock apears to be less risky and, when comparing its historical volatility, Menthobi Karyatama Raya is 1.05 times less risky than Mahkota Group. The stock trades about -0.01 of its potential returns per unit of risk. The Mahkota Group Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 65,000 in Mahkota Group Tbk on September 12, 2024 and sell it today you would earn a total of 4,500 from holding Mahkota Group Tbk or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Menthobi Karyatama Raya vs. Mahkota Group Tbk
Performance |
| Timeline |
| Menthobi Karyatama Raya |
| Mahkota Group Tbk |
Menthobi Karyatama and Mahkota Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Menthobi Karyatama and Mahkota Group
The main advantage of trading using opposite Menthobi Karyatama and Mahkota Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Menthobi Karyatama position performs unexpectedly, Mahkota Group 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 Mahkota Group will offset losses from the drop in Mahkota Group's long position.| Menthobi Karyatama vs. Mahkota Group Tbk | Menthobi Karyatama vs. Palma Serasih PT | Menthobi Karyatama vs. Cisadane Sawit Raya | Menthobi Karyatama vs. Diamond Food Indonesia |
| Mahkota Group vs. Austindo Nusantara Jaya | Mahkota Group vs. Garudafood Putra Putri | Mahkota Group vs. Provident Agro Tbk | Mahkota Group vs. Dharma Satya Nusantara |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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