Correlation Between Mitra Pinasthika and Polychem Indonesia
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Polychem 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 Mitra Pinasthika and Polychem Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitra Pinasthika Mustika and Polychem Indonesia Tbk, you can compare the effects of market volatilities on Mitra Pinasthika and Polychem 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 Mitra Pinasthika with a short position of Polychem Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Polychem Indonesia.
Diversification Opportunities for Mitra Pinasthika and Polychem Indonesia
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mitra and Polychem is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Polychem Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polychem Indonesia Tbk and Mitra Pinasthika 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 Pinasthika Mustika are associated (or correlated) with Polychem Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polychem Indonesia Tbk has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Polychem Indonesia go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Polychem Indonesia
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to generate 0.53 times more return on investment than Polychem Indonesia. However, Mitra Pinasthika Mustika is 1.87 times less risky than Polychem Indonesia. It trades about 0.02 of its potential returns per unit of risk. Polychem Indonesia Tbk is currently generating about -0.01 per unit of risk. If you would invest 89,607 in Mitra Pinasthika Mustika on September 3, 2024 and sell it today you would earn a total of 9,393 from holding Mitra Pinasthika Mustika or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Polychem Indonesia Tbk
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Polychem Indonesia Tbk |
Mitra Pinasthika and Polychem Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Polychem Indonesia
The main advantage of trading using opposite Mitra Pinasthika and Polychem Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Polychem 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 Polychem Indonesia will offset losses from the drop in Polychem Indonesia's long position.| Mitra Pinasthika vs. Saratoga Investama Sedaya | Mitra Pinasthika vs. Puradelta Lestari PT | Mitra Pinasthika vs. Cikarang Listrindo Tbk | Mitra Pinasthika vs. Erajaya Swasembada Tbk |
| Polychem Indonesia vs. Gajah Tunggal Tbk | Polychem Indonesia vs. Astra Graphia Tbk | Polychem Indonesia vs. Citra Marga Nusaphala | Polychem Indonesia vs. Sentul City Tbk |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |