Correlation Between Mitra Pinasthika and Intanwijaya Internasional
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Intanwijaya Internasional 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 Intanwijaya Internasional 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 Intanwijaya Internasional Tbk, you can compare the effects of market volatilities on Mitra Pinasthika and Intanwijaya Internasional 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 Intanwijaya Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Intanwijaya Internasional.
Diversification Opportunities for Mitra Pinasthika and Intanwijaya Internasional
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mitra and Intanwijaya is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Intanwijaya Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intanwijaya Internasional 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 Intanwijaya Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intanwijaya Internasional has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Intanwijaya Internasional go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Intanwijaya Internasional
Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 2.05 times less return on investment than Intanwijaya Internasional. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 1.85 times less risky than Intanwijaya Internasional. It trades about 0.08 of its potential returns per unit of risk. Intanwijaya Internasional Tbk is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 48,593 in Intanwijaya Internasional Tbk on September 3, 2024 and sell it today you would earn a total of 9,407 from holding Intanwijaya Internasional Tbk or generate 19.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Intanwijaya Internasional Tbk
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Intanwijaya Internasional |
Mitra Pinasthika and Intanwijaya Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Intanwijaya Internasional
The main advantage of trading using opposite Mitra Pinasthika and Intanwijaya Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Intanwijaya Internasional 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 Intanwijaya Internasional will offset losses from the drop in Intanwijaya Internasional'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 |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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