Correlation Between Mitra Pinasthika and Red Planet
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Red Planet 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 Red Planet 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 Red Planet Indonesia, you can compare the effects of market volatilities on Mitra Pinasthika and Red Planet 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 Red Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Red Planet.
Diversification Opportunities for Mitra Pinasthika and Red Planet
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitra and Red is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Red Planet Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Planet Indonesia 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 Red Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Planet Indonesia has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Red Planet go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Red Planet
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to under-perform the Red Planet. But the stock apears to be less risky and, when comparing its historical volatility, Mitra Pinasthika Mustika is 9.95 times less risky than Red Planet. The stock trades about -0.17 of its potential returns per unit of risk. The Red Planet Indonesia is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 2,100 in Red Planet Indonesia on September 3, 2024 and sell it today you would earn a total of 1,000.00 from holding Red Planet Indonesia or generate 47.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Red Planet Indonesia
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Red Planet Indonesia |
Mitra Pinasthika and Red Planet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Red Planet
The main advantage of trading using opposite Mitra Pinasthika and Red Planet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Red Planet 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 Red Planet will offset losses from the drop in Red Planet'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 |
| Red Planet vs. Mitra Pinasthika Mustika | Red Planet vs. Jakarta Int Hotels | Red Planet vs. Asuransi Harta Aman | Red Planet vs. Indosterling Technomedia 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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