Correlation Between Minna Padi and Merck Tbk
Can any of the company-specific risk be diversified away by investing in both Minna Padi and Merck Tbk 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 Minna Padi and Merck Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minna Padi Investama and Merck Tbk, you can compare the effects of market volatilities on Minna Padi and Merck Tbk 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 Minna Padi with a short position of Merck Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minna Padi and Merck Tbk.
Diversification Opportunities for Minna Padi and Merck Tbk
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Minna and Merck is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Minna Padi Investama and Merck Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Tbk and Minna Padi 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 Minna Padi Investama are associated (or correlated) with Merck Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck Tbk has no effect on the direction of Minna Padi i.e., Minna Padi and Merck Tbk go up and down completely randomly.
Pair Corralation between Minna Padi and Merck Tbk
Assuming the 90 days trading horizon Minna Padi Investama is expected to generate 10.09 times more return on investment than Merck Tbk. However, Minna Padi is 10.09 times more volatile than Merck Tbk. It trades about 0.04 of its potential returns per unit of risk. Merck Tbk is currently generating about -0.08 per unit of risk. If you would invest 1,000.00 in Minna Padi Investama on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Minna Padi Investama or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minna Padi Investama vs. Merck Tbk
Performance |
| Timeline |
| Minna Padi Investama |
| Merck Tbk |
Minna Padi and Merck Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minna Padi and Merck Tbk
The main advantage of trading using opposite Minna Padi and Merck Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minna Padi position performs unexpectedly, Merck Tbk 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 Merck Tbk will offset losses from the drop in Merck Tbk's long position.| Minna Padi vs. Panca Global Securities | Minna Padi vs. Panin Sekuritas Tbk | Minna Padi vs. Reliance Securities Tbk | Minna Padi vs. Bank Nationalnobu Tbk |
| Merck Tbk vs. Darya Varia Laboratoria Tbk | Merck Tbk vs. Tempo Scan Pacific | Merck Tbk vs. Pyridam Farma Tbk | Merck Tbk vs. Multi Bintang 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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