Correlation Between Mitra Pinasthika and Colorpak Indonesia
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Colorpak 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 Colorpak 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 Colorpak Indonesia Tbk, you can compare the effects of market volatilities on Mitra Pinasthika and Colorpak 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 Colorpak Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Colorpak Indonesia.
Diversification Opportunities for Mitra Pinasthika and Colorpak Indonesia
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitra and Colorpak is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Colorpak Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colorpak 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 Colorpak Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colorpak Indonesia Tbk has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Colorpak Indonesia go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Colorpak Indonesia
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to under-perform the Colorpak Indonesia. In addition to that, Mitra Pinasthika is 1.01 times more volatile than Colorpak Indonesia Tbk. It trades about -0.25 of its total potential returns per unit of risk. Colorpak Indonesia Tbk is currently generating about -0.24 per unit of volatility. If you would invest 107,500 in Colorpak Indonesia Tbk on September 1, 2024 and sell it today you would lose (2,500) from holding Colorpak Indonesia Tbk or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Colorpak Indonesia Tbk
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Colorpak Indonesia Tbk |
Mitra Pinasthika and Colorpak Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Colorpak Indonesia
The main advantage of trading using opposite Mitra Pinasthika and Colorpak Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Colorpak 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 Colorpak Indonesia will offset losses from the drop in Colorpak 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 |
| Colorpak Indonesia vs. Perusahaan Gas Negara | Colorpak Indonesia vs. Telkom Indonesia Tbk | Colorpak Indonesia vs. Mitra Pinasthika Mustika | Colorpak Indonesia vs. Jakarta Int Hotels |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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