Correlation Between PT Techno9 and Menthobi Karyatama
Can any of the company-specific risk be diversified away by investing in both PT Techno9 and Menthobi Karyatama 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 PT Techno9 and Menthobi Karyatama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Techno9 Indonesia and Menthobi Karyatama Raya, you can compare the effects of market volatilities on PT Techno9 and Menthobi Karyatama 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 PT Techno9 with a short position of Menthobi Karyatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Techno9 and Menthobi Karyatama.
Diversification Opportunities for PT Techno9 and Menthobi Karyatama
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NINE and Menthobi is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding PT Techno9 Indonesia and Menthobi Karyatama Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menthobi Karyatama Raya and PT Techno9 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 PT Techno9 Indonesia are associated (or correlated) with Menthobi Karyatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menthobi Karyatama Raya has no effect on the direction of PT Techno9 i.e., PT Techno9 and Menthobi Karyatama go up and down completely randomly.
Pair Corralation between PT Techno9 and Menthobi Karyatama
Assuming the 90 days trading horizon PT Techno9 Indonesia is expected to generate 2.06 times more return on investment than Menthobi Karyatama. However, PT Techno9 is 2.06 times more volatile than Menthobi Karyatama Raya. It trades about 2.58 of its potential returns per unit of risk. Menthobi Karyatama Raya is currently generating about -0.17 per unit of risk. If you would invest 1,000.00 in PT Techno9 Indonesia on September 2, 2024 and sell it today you would earn a total of 3,200 from holding PT Techno9 Indonesia or generate 320.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Techno9 Indonesia vs. Menthobi Karyatama Raya
Performance |
| Timeline |
| PT Techno9 Indonesia |
| Menthobi Karyatama Raya |
PT Techno9 and Menthobi Karyatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Techno9 and Menthobi Karyatama
The main advantage of trading using opposite PT Techno9 and Menthobi Karyatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Techno9 position performs unexpectedly, Menthobi Karyatama 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 Menthobi Karyatama will offset losses from the drop in Menthobi Karyatama's long position.| PT Techno9 vs. Multipolar Technology Tbk | PT Techno9 vs. Digital Mediatama Maxima | PT Techno9 vs. NFC Indonesia PT | PT Techno9 vs. Kioson Komersial Indonesia |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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