Correlation Between Mitra Pinasthika and Sekar Bumi
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Sekar Bumi 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 Sekar Bumi 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 Sekar Bumi Tbk, you can compare the effects of market volatilities on Mitra Pinasthika and Sekar Bumi 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 Sekar Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Sekar Bumi.
Diversification Opportunities for Mitra Pinasthika and Sekar Bumi
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitra and Sekar is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Sekar Bumi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekar Bumi Tbk 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 Sekar Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekar Bumi Tbk has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Sekar Bumi go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Sekar Bumi
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to generate 0.31 times more return on investment than Sekar Bumi. However, Mitra Pinasthika Mustika is 3.24 times less risky than Sekar Bumi. It trades about -0.25 of its potential returns per unit of risk. Sekar Bumi Tbk is currently generating about -0.25 per unit of risk. If you would invest 101,500 in Mitra Pinasthika Mustika on September 1, 2024 and sell it today you would lose (2,500) from holding Mitra Pinasthika Mustika or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Sekar Bumi Tbk
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Sekar Bumi Tbk |
Mitra Pinasthika and Sekar Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Sekar Bumi
The main advantage of trading using opposite Mitra Pinasthika and Sekar Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Sekar Bumi 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 Sekar Bumi will offset losses from the drop in Sekar Bumi'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 |
| Sekar Bumi vs. Bank BRISyariah Tbk | Sekar Bumi vs. Mitra Pinasthika Mustika | Sekar Bumi vs. Jakarta Int Hotels | Sekar Bumi 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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