Correlation Between Matahari Putra and Kawasan Industri
Can any of the company-specific risk be diversified away by investing in both Matahari Putra and Kawasan Industri 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 Matahari Putra and Kawasan Industri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matahari Putra Prima and Kawasan Industri Jababeka, you can compare the effects of market volatilities on Matahari Putra and Kawasan Industri 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 Matahari Putra with a short position of Kawasan Industri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matahari Putra and Kawasan Industri.
Diversification Opportunities for Matahari Putra and Kawasan Industri
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matahari and Kawasan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Matahari Putra Prima and Kawasan Industri Jababeka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawasan Industri Jababeka and Matahari Putra 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 Matahari Putra Prima are associated (or correlated) with Kawasan Industri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawasan Industri Jababeka has no effect on the direction of Matahari Putra i.e., Matahari Putra and Kawasan Industri go up and down completely randomly.
Pair Corralation between Matahari Putra and Kawasan Industri
Assuming the 90 days trading horizon Matahari Putra Prima is expected to under-perform the Kawasan Industri. In addition to that, Matahari Putra is 8.48 times more volatile than Kawasan Industri Jababeka. It trades about -0.03 of its total potential returns per unit of risk. Kawasan Industri Jababeka is currently generating about 0.09 per unit of volatility. If you would invest 19,200 in Kawasan Industri Jababeka on August 28, 2024 and sell it today you would earn a total of 400.00 from holding Kawasan Industri Jababeka or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matahari Putra Prima vs. Kawasan Industri Jababeka
Performance |
| Timeline |
| Matahari Putra Prima |
| Kawasan Industri Jababeka |
Matahari Putra and Kawasan Industri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matahari Putra and Kawasan Industri
The main advantage of trading using opposite Matahari Putra and Kawasan Industri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matahari Putra position performs unexpectedly, Kawasan Industri 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 Kawasan Industri will offset losses from the drop in Kawasan Industri's long position.| Matahari Putra vs. Multipolar Tbk | Matahari Putra vs. Ramayana Lestari Sentosa | Matahari Putra vs. Lippo Karawaci Tbk | Matahari Putra vs. Mitra Adiperkasa Tbk |
| Kawasan Industri vs. Bakrieland Development Tbk | Kawasan Industri vs. Ciputra Development Tbk | Kawasan Industri vs. Sentul City Tbk | Kawasan Industri vs. Solusi Bangun Indonesia |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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