Correlation Between Mitra Pinasthika and Madusari Murni
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Madusari Murni 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 Madusari Murni 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 Madusari Murni Indah, you can compare the effects of market volatilities on Mitra Pinasthika and Madusari Murni 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 Madusari Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Madusari Murni.
Diversification Opportunities for Mitra Pinasthika and Madusari Murni
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mitra and Madusari is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Madusari Murni Indah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madusari Murni Indah 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 Madusari Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madusari Murni Indah has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Madusari Murni go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Madusari Murni
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to generate 0.25 times more return on investment than Madusari Murni. However, Mitra Pinasthika Mustika is 3.98 times less risky than Madusari Murni. It trades about -0.28 of its potential returns per unit of risk. Madusari Murni Indah is currently generating about -0.21 per unit of risk. If you would invest 102,500 in Mitra Pinasthika Mustika on August 31, 2024 and sell it today you would lose (3,000) from holding Mitra Pinasthika Mustika or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Madusari Murni Indah
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Madusari Murni Indah |
Mitra Pinasthika and Madusari Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Madusari Murni
The main advantage of trading using opposite Mitra Pinasthika and Madusari Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Madusari Murni 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 Madusari Murni will offset losses from the drop in Madusari Murni'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 |
| Madusari Murni vs. Perusahaan Gas Negara | Madusari Murni vs. Vale Indonesia Tbk | Madusari Murni vs. Telkom Indonesia Tbk | Madusari Murni 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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