Correlation Between Mitra Pinasthika and Tirta Mahakam
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Tirta Mahakam 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 Tirta Mahakam 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 Tirta Mahakam Resources, you can compare the effects of market volatilities on Mitra Pinasthika and Tirta Mahakam 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 Tirta Mahakam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Tirta Mahakam.
Diversification Opportunities for Mitra Pinasthika and Tirta Mahakam
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mitra and Tirta is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Tirta Mahakam Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tirta Mahakam Resources 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 Tirta Mahakam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tirta Mahakam Resources has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Tirta Mahakam go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Tirta Mahakam
Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 1.2 times less return on investment than Tirta Mahakam. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 6.0 times less risky than Tirta Mahakam. It trades about 0.05 of its potential returns per unit of risk. Tirta Mahakam Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Tirta Mahakam Resources on September 6, 2024 and sell it today you would lose (1,300) from holding Tirta Mahakam Resources or give up 26.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Tirta Mahakam Resources
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Tirta Mahakam Resources |
Mitra Pinasthika and Tirta Mahakam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Tirta Mahakam
The main advantage of trading using opposite Mitra Pinasthika and Tirta Mahakam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Tirta Mahakam 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 Tirta Mahakam will offset losses from the drop in Tirta Mahakam's long position.| Mitra Pinasthika vs. Asuransi Harta Aman | Mitra Pinasthika vs. Indosterling Technomedia Tbk | Mitra Pinasthika vs. Indosat Tbk | Mitra Pinasthika vs. Bank Negara Indonesia |
| Tirta Mahakam vs. Slj Global Tbk | Tirta Mahakam vs. Indo Acidatama Tbk | Tirta Mahakam vs. Trias Sentosa Tbk | Tirta Mahakam vs. Suparma 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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