Correlation Between PT Mulia and PT Indonesia
Can any of the company-specific risk be diversified away by investing in both PT Mulia and PT Indonesia 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 PT Mulia and PT Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Mulia Industrindo and PT Indonesia Kendaraan, you can compare the effects of market volatilities on PT Mulia and PT Indonesia 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 PT Mulia with a short position of PT Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Mulia and PT Indonesia.
Diversification Opportunities for PT Mulia and PT Indonesia
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MLIA and IPCC is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding PT Mulia Industrindo and PT Indonesia Kendaraan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indonesia Kendaraan and PT Mulia 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 PT Mulia Industrindo are associated (or correlated) with PT Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indonesia Kendaraan has no effect on the direction of PT Mulia i.e., PT Mulia and PT Indonesia go up and down completely randomly.
Pair Corralation between PT Mulia and PT Indonesia
Assuming the 90 days trading horizon PT Mulia is expected to generate 4.68 times less return on investment than PT Indonesia. But when comparing it to its historical volatility, PT Mulia Industrindo is 2.15 times less risky than PT Indonesia. It trades about 0.0 of its potential returns per unit of risk. PT Indonesia Kendaraan is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 71,991 in PT Indonesia Kendaraan on September 13, 2024 and sell it today you would earn a total of 9.00 from holding PT Indonesia Kendaraan or generate 0.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Mulia Industrindo vs. PT Indonesia Kendaraan
Performance |
| Timeline |
| PT Mulia Industrindo |
| PT Indonesia Kendaraan |
PT Mulia and PT Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Mulia and PT Indonesia
The main advantage of trading using opposite PT Mulia and PT Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Mulia position performs unexpectedly, PT Indonesia 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 PT Indonesia will offset losses from the drop in PT Indonesia's long position.| PT Mulia vs. PT Indonesia Kendaraan | PT Mulia vs. Surya Toto Indonesia | PT Mulia vs. Mitra Pinasthika Mustika | PT Mulia vs. Integra Indocabinet Tbk |
| PT Indonesia vs. Jasa Armada Indonesia | PT Indonesia vs. Cikarang Listrindo Tbk | PT Indonesia vs. Mitra Pinasthika Mustika | PT Indonesia vs. Wijaya Karya Bangunan |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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