Correlation Between Megapower Makmur and PP Presisi
Can any of the company-specific risk be diversified away by investing in both Megapower Makmur and PP Presisi 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 Megapower Makmur and PP Presisi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Megapower Makmur TBK and PP Presisi Tbk, you can compare the effects of market volatilities on Megapower Makmur and PP Presisi 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 Megapower Makmur with a short position of PP Presisi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megapower Makmur and PP Presisi.
Diversification Opportunities for Megapower Makmur and PP Presisi
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Megapower and PPRE is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Megapower Makmur TBK and PP Presisi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PP Presisi Tbk and Megapower Makmur 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 Megapower Makmur TBK are associated (or correlated) with PP Presisi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PP Presisi Tbk has no effect on the direction of Megapower Makmur i.e., Megapower Makmur and PP Presisi go up and down completely randomly.
Pair Corralation between Megapower Makmur and PP Presisi
Assuming the 90 days trading horizon Megapower Makmur TBK is expected to generate 1.46 times more return on investment than PP Presisi. However, Megapower Makmur is 1.46 times more volatile than PP Presisi Tbk. It trades about 0.02 of its potential returns per unit of risk. PP Presisi Tbk is currently generating about -0.03 per unit of risk. If you would invest 8,200 in Megapower Makmur TBK on September 4, 2024 and sell it today you would lose (200.00) from holding Megapower Makmur TBK or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Megapower Makmur TBK vs. PP Presisi Tbk
Performance |
| Timeline |
| Megapower Makmur TBK |
| PP Presisi Tbk |
Megapower Makmur and PP Presisi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megapower Makmur and PP Presisi
The main advantage of trading using opposite Megapower Makmur and PP Presisi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megapower Makmur position performs unexpectedly, PP Presisi 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 PP Presisi will offset losses from the drop in PP Presisi's long position.| Megapower Makmur vs. Terregra Asia Energy | Megapower Makmur vs. Bali Towerindo Sentra | Megapower Makmur vs. Sanurhasta Mitra PT | Megapower Makmur vs. Kencana Energi Lestari |
| PP Presisi vs. Wijaya Karya Bangunan | PP Presisi vs. PP Properti Tbk | PP Presisi vs. Wijaya Karya Beton | PP Presisi vs. Soechi Lines 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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