Correlation Between Mitra Pinasthika and Darma Henwa
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Darma Henwa 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 Darma Henwa 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 Darma Henwa Tbk, you can compare the effects of market volatilities on Mitra Pinasthika and Darma Henwa 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 Darma Henwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Darma Henwa.
Diversification Opportunities for Mitra Pinasthika and Darma Henwa
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mitra and Darma is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Darma Henwa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Darma Henwa 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 Darma Henwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Darma Henwa Tbk has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Darma Henwa go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Darma Henwa
Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 10.02 times less return on investment than Darma Henwa. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 3.53 times less risky than Darma Henwa. It trades about 0.02 of its potential returns per unit of risk. Darma Henwa Tbk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Darma Henwa Tbk on August 31, 2024 and sell it today you would earn a total of 5,500 from holding Darma Henwa Tbk or generate 110.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Darma Henwa Tbk
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Darma Henwa Tbk |
Mitra Pinasthika and Darma Henwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Darma Henwa
The main advantage of trading using opposite Mitra Pinasthika and Darma Henwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Darma Henwa 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 Darma Henwa will offset losses from the drop in Darma Henwa'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 |
| Darma Henwa vs. Perusahaan Gas Negara | Darma Henwa vs. Vale Indonesia Tbk | Darma Henwa vs. Telkom Indonesia Tbk | Darma Henwa vs. Mitra Pinasthika Mustika |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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