Correlation Between Mitra Pinasthika and Jakarta Setiabudi
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Jakarta Setiabudi 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 Jakarta Setiabudi 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 Jakarta Setiabudi Internasional, you can compare the effects of market volatilities on Mitra Pinasthika and Jakarta Setiabudi 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 Jakarta Setiabudi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Jakarta Setiabudi.
Diversification Opportunities for Mitra Pinasthika and Jakarta Setiabudi
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitra and Jakarta is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Jakarta Setiabudi Internasiona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jakarta Setiabudi 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 Jakarta Setiabudi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jakarta Setiabudi has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Jakarta Setiabudi go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Jakarta Setiabudi
Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 24.14 times less return on investment than Jakarta Setiabudi. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 6.04 times less risky than Jakarta Setiabudi. It trades about 0.03 of its potential returns per unit of risk. Jakarta Setiabudi Internasional is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 84,962 in Jakarta Setiabudi Internasional on September 4, 2024 and sell it today you would earn a total of 815,038 from holding Jakarta Setiabudi Internasional or generate 959.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Jakarta Setiabudi Internasiona
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Jakarta Setiabudi |
Mitra Pinasthika and Jakarta Setiabudi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Jakarta Setiabudi
The main advantage of trading using opposite Mitra Pinasthika and Jakarta Setiabudi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Jakarta Setiabudi 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 Jakarta Setiabudi will offset losses from the drop in Jakarta Setiabudi's long position.| Mitra Pinasthika vs. Jakarta Int Hotels | Mitra Pinasthika vs. Asuransi Harta Aman | Mitra Pinasthika vs. Indosterling Technomedia Tbk | Mitra Pinasthika vs. Indosat Tbk |
| Jakarta Setiabudi vs. Jakarta Int Hotels | Jakarta Setiabudi vs. Asuransi Harta Aman | Jakarta Setiabudi vs. Indosterling Technomedia Tbk | Jakarta Setiabudi vs. Indosat 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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