Correlation Between Mitra Pinasthika and Hexindo Adiperkasa
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Hexindo Adiperkasa 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 Hexindo Adiperkasa 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 Hexindo Adiperkasa Tbk, you can compare the effects of market volatilities on Mitra Pinasthika and Hexindo Adiperkasa 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 Hexindo Adiperkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Hexindo Adiperkasa.
Diversification Opportunities for Mitra Pinasthika and Hexindo Adiperkasa
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitra and Hexindo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Hexindo Adiperkasa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexindo Adiperkasa 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 Hexindo Adiperkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexindo Adiperkasa Tbk has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Hexindo Adiperkasa go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Hexindo Adiperkasa
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to generate 0.41 times more return on investment than Hexindo Adiperkasa. However, Mitra Pinasthika Mustika is 2.45 times less risky than Hexindo Adiperkasa. It trades about -0.36 of its potential returns per unit of risk. Hexindo Adiperkasa Tbk is currently generating about -0.61 per unit of risk. If you would invest 103,000 in Mitra Pinasthika Mustika on August 26, 2024 and sell it today you would lose (4,000) from holding Mitra Pinasthika Mustika or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Hexindo Adiperkasa Tbk
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Hexindo Adiperkasa Tbk |
Mitra Pinasthika and Hexindo Adiperkasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Hexindo Adiperkasa
The main advantage of trading using opposite Mitra Pinasthika and Hexindo Adiperkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Hexindo Adiperkasa 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 Hexindo Adiperkasa will offset losses from the drop in Hexindo Adiperkasa'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 |
| Hexindo Adiperkasa vs. Rukun Raharja Tbk | Hexindo Adiperkasa vs. PT Temas Tbk | Hexindo Adiperkasa vs. Weha Transportasi Indonesia |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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