Correlation Between Mustika Ratu and Kabelindo Murni
Can any of the company-specific risk be diversified away by investing in both Mustika Ratu and Kabelindo Murni 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 Kabelindo Murni 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 Kabelindo Murni Tbk, you can compare the effects of market volatilities on Mustika Ratu and Kabelindo Murni 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 Kabelindo Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mustika Ratu and Kabelindo Murni.
Diversification Opportunities for Mustika Ratu and Kabelindo Murni
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mustika and Kabelindo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mustika Ratu Tbk and Kabelindo Murni Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kabelindo Murni Tbk 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 Kabelindo Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kabelindo Murni Tbk has no effect on the direction of Mustika Ratu i.e., Mustika Ratu and Kabelindo Murni go up and down completely randomly.
Pair Corralation between Mustika Ratu and Kabelindo Murni
Assuming the 90 days trading horizon Mustika Ratu Tbk is expected to under-perform the Kabelindo Murni. In addition to that, Mustika Ratu is 1.24 times more volatile than Kabelindo Murni Tbk. It trades about -0.09 of its total potential returns per unit of risk. Kabelindo Murni Tbk is currently generating about 0.04 per unit of volatility. If you would invest 26,623 in Kabelindo Murni Tbk on August 24, 2024 and sell it today you would earn a total of 4,377 from holding Kabelindo Murni Tbk or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mustika Ratu Tbk vs. Kabelindo Murni Tbk
Performance |
| Timeline |
| Mustika Ratu Tbk |
| Kabelindo Murni Tbk |
Mustika Ratu and Kabelindo Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mustika Ratu and Kabelindo Murni
The main advantage of trading using opposite Mustika Ratu and Kabelindo Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mustika Ratu position performs unexpectedly, Kabelindo Murni 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 Kabelindo Murni will offset losses from the drop in Kabelindo Murni'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 |
| Kabelindo Murni vs. Kmi Wire And | Kabelindo Murni vs. Jembo Cable | Kabelindo Murni vs. Sumi Indo Kabel | Kabelindo Murni vs. Voksel Electric 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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