Correlation Between Mustika Ratu and Impack Pratama
Can any of the company-specific risk be diversified away by investing in both Mustika Ratu and Impack Pratama 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 Mustika Ratu and Impack Pratama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mustika Ratu Tbk and Impack Pratama Industri, you can compare the effects of market volatilities on Mustika Ratu and Impack Pratama 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 Mustika Ratu with a short position of Impack Pratama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mustika Ratu and Impack Pratama.
Diversification Opportunities for Mustika Ratu and Impack Pratama
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mustika and Impack is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mustika Ratu Tbk and Impack Pratama Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impack Pratama Industri and Mustika Ratu 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 Mustika Ratu Tbk are associated (or correlated) with Impack Pratama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impack Pratama Industri has no effect on the direction of Mustika Ratu i.e., Mustika Ratu and Impack Pratama go up and down completely randomly.
Pair Corralation between Mustika Ratu and Impack Pratama
Assuming the 90 days trading horizon Mustika Ratu Tbk is expected to under-perform the Impack Pratama. In addition to that, Mustika Ratu is 1.24 times more volatile than Impack Pratama Industri. It trades about -0.09 of its total potential returns per unit of risk. Impack Pratama Industri is currently generating about -0.01 per unit of volatility. If you would invest 35,726 in Impack Pratama Industri on August 25, 2024 and sell it today you would lose (1,726) from holding Impack Pratama Industri or give up 4.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mustika Ratu Tbk vs. Impack Pratama Industri
Performance |
| Timeline |
| Mustika Ratu Tbk |
| Impack Pratama Industri |
Mustika Ratu and Impack Pratama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mustika Ratu and Impack Pratama
The main advantage of trading using opposite Mustika Ratu and Impack Pratama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mustika Ratu position performs unexpectedly, Impack Pratama 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 Impack Pratama will offset losses from the drop in Impack Pratama's long position.| Mustika Ratu vs. Pyridam Farma Tbk | Mustika Ratu vs. Mandom Indonesia Tbk | Mustika Ratu vs. Langgeng Makmur Industri | Mustika Ratu vs. Merck Tbk |
| Impack Pratama vs. Kedaung Indah Can | Impack Pratama vs. Langgeng Makmur Industri | Impack Pratama vs. Kabelindo Murni Tbk | Impack Pratama vs. Mustika Ratu 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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