Correlation Between Mustika Ratu and Siantar Top
Can any of the company-specific risk be diversified away by investing in both Mustika Ratu and Siantar Top 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 Siantar Top 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 Siantar Top Tbk, you can compare the effects of market volatilities on Mustika Ratu and Siantar Top 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 Siantar Top. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mustika Ratu and Siantar Top.
Diversification Opportunities for Mustika Ratu and Siantar Top
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mustika and Siantar is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mustika Ratu Tbk and Siantar Top Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siantar Top 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 Siantar Top. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siantar Top Tbk has no effect on the direction of Mustika Ratu i.e., Mustika Ratu and Siantar Top go up and down completely randomly.
Pair Corralation between Mustika Ratu and Siantar Top
Assuming the 90 days trading horizon Mustika Ratu Tbk is expected to under-perform the Siantar Top. In addition to that, Mustika Ratu is 1.07 times more volatile than Siantar Top Tbk. It trades about -0.09 of its total potential returns per unit of risk. Siantar Top Tbk is currently generating about 0.07 per unit of volatility. If you would invest 1,005,000 in Siantar Top Tbk on August 24, 2024 and sell it today you would earn a total of 415,000 from holding Siantar Top Tbk or generate 41.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mustika Ratu Tbk vs. Siantar Top Tbk
Performance |
| Timeline |
| Mustika Ratu Tbk |
| Siantar Top Tbk |
Mustika Ratu and Siantar Top Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mustika Ratu and Siantar Top
The main advantage of trading using opposite Mustika Ratu and Siantar Top positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mustika Ratu position performs unexpectedly, Siantar Top 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 Siantar Top will offset losses from the drop in Siantar Top's long position.| Mustika Ratu vs. Unilever Indonesia Tbk | Mustika Ratu vs. PT Indofood Sukses | Mustika Ratu vs. Astra International Tbk | Mustika Ratu vs. Telkom Indonesia Tbk |
| Siantar Top vs. Unilever Indonesia Tbk | Siantar Top vs. PT Indofood Sukses | Siantar Top vs. Astra International Tbk | Siantar Top vs. Telkom Indonesia 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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