Correlation Between Mitra Pinasthika and Putra Mandiri
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Putra Mandiri 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 Putra Mandiri 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 Putra Mandiri Jembar, you can compare the effects of market volatilities on Mitra Pinasthika and Putra Mandiri 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 Putra Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Putra Mandiri.
Diversification Opportunities for Mitra Pinasthika and Putra Mandiri
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitra and Putra is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Putra Mandiri Jembar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Mandiri Jembar 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 Putra Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Mandiri Jembar has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Putra Mandiri go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Putra Mandiri
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to generate 0.43 times more return on investment than Putra Mandiri. However, Mitra Pinasthika Mustika is 2.33 times less risky than Putra Mandiri. It trades about 0.03 of its potential returns per unit of risk. Putra Mandiri Jembar is currently generating about -0.01 per unit of risk. If you would invest 89,151 in Mitra Pinasthika Mustika on August 31, 2024 and sell it today you would earn a total of 9,849 from holding Mitra Pinasthika Mustika or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Putra Mandiri Jembar
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Putra Mandiri Jembar |
Mitra Pinasthika and Putra Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Putra Mandiri
The main advantage of trading using opposite Mitra Pinasthika and Putra Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Putra Mandiri 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 Putra Mandiri will offset losses from the drop in Putra Mandiri'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 |
| Putra Mandiri vs. Adaro Minerals Indonesia | Putra Mandiri vs. Dharma Polimetal Tbk | Putra Mandiri vs. Wir Asia Tbk | Putra Mandiri vs. Adi Sarana Armada |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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