Correlation Between Mitra Pinasthika and Pertamina Geothermal
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Pertamina Geothermal 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 Pertamina Geothermal 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 Pertamina Geothermal Energy, you can compare the effects of market volatilities on Mitra Pinasthika and Pertamina Geothermal 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 Pertamina Geothermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Pertamina Geothermal.
Diversification Opportunities for Mitra Pinasthika and Pertamina Geothermal
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mitra and Pertamina is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Pertamina Geothermal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pertamina Geothermal 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 Pertamina Geothermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pertamina Geothermal has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Pertamina Geothermal go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Pertamina Geothermal
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to generate 0.4 times more return on investment than Pertamina Geothermal. However, Mitra Pinasthika Mustika is 2.5 times less risky than Pertamina Geothermal. It trades about -0.13 of its potential returns per unit of risk. Pertamina Geothermal Energy is currently generating about -0.15 per unit of risk. If you would invest 103,500 in Mitra Pinasthika Mustika on September 3, 2024 and sell it today you would lose (4,500) from holding Mitra Pinasthika Mustika or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Pertamina Geothermal Energy
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Pertamina Geothermal |
Mitra Pinasthika and Pertamina Geothermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Pertamina Geothermal
The main advantage of trading using opposite Mitra Pinasthika and Pertamina Geothermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Pertamina Geothermal 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 Pertamina Geothermal will offset losses from the drop in Pertamina Geothermal'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 |
| Pertamina Geothermal vs. Chandra Asri Petrochemical | Pertamina Geothermal vs. Bank Negara Indonesia | Pertamina Geothermal vs. Sumber Alfaria Trijaya | Pertamina Geothermal 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |