Correlation Between Mitra Pinasthika and Wahana Ottomitra
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Wahana Ottomitra 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 Wahana Ottomitra 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 Wahana Ottomitra Multiartha, you can compare the effects of market volatilities on Mitra Pinasthika and Wahana Ottomitra 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 Wahana Ottomitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Wahana Ottomitra.
Diversification Opportunities for Mitra Pinasthika and Wahana Ottomitra
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitra and Wahana is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Wahana Ottomitra Multiartha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Ottomitra Mul 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 Wahana Ottomitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Ottomitra Mul has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Wahana Ottomitra go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Wahana Ottomitra
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to under-perform the Wahana Ottomitra. But the stock apears to be less risky and, when comparing its historical volatility, Mitra Pinasthika Mustika is 2.21 times less risky than Wahana Ottomitra. The stock trades about -0.22 of its potential returns per unit of risk. The Wahana Ottomitra Multiartha is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 35,400 in Wahana Ottomitra Multiartha on September 5, 2024 and sell it today you would earn a total of 200.00 from holding Wahana Ottomitra Multiartha or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Wahana Ottomitra Multiartha
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Wahana Ottomitra Mul |
Mitra Pinasthika and Wahana Ottomitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Wahana Ottomitra
The main advantage of trading using opposite Mitra Pinasthika and Wahana Ottomitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Wahana Ottomitra 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 Wahana Ottomitra will offset losses from the drop in Wahana Ottomitra's long position.| Mitra Pinasthika vs. Jakarta Int Hotels | Mitra Pinasthika vs. Asuransi Harta Aman | Mitra Pinasthika vs. Indosterling Technomedia Tbk | Mitra Pinasthika vs. Indosat Tbk |
| Wahana Ottomitra vs. Paninvest Tbk | Wahana Ottomitra vs. Mitra Pinasthika Mustika | Wahana Ottomitra vs. Jakarta Int Hotels | Wahana Ottomitra vs. Asuransi Harta Aman |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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