Correlation Between Minna Padi and United Tractors
Can any of the company-specific risk be diversified away by investing in both Minna Padi and United Tractors 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 United Tractors 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 United Tractors Tbk, you can compare the effects of market volatilities on Minna Padi and United Tractors 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 United Tractors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minna Padi and United Tractors.
Diversification Opportunities for Minna Padi and United Tractors
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Minna and United is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Minna Padi Investama and United Tractors Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Tractors 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 United Tractors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Tractors Tbk has no effect on the direction of Minna Padi i.e., Minna Padi and United Tractors go up and down completely randomly.
Pair Corralation between Minna Padi and United Tractors
Assuming the 90 days trading horizon Minna Padi Investama is expected to under-perform the United Tractors. In addition to that, Minna Padi is 3.35 times more volatile than United Tractors Tbk. It trades about -0.02 of its total potential returns per unit of risk. United Tractors Tbk is currently generating about 0.05 per unit of volatility. If you would invest 1,750,865 in United Tractors Tbk on November 2, 2024 and sell it today you would earn a total of 684,135 from holding United Tractors Tbk or generate 39.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Minna Padi Investama vs. United Tractors Tbk
Performance |
| Timeline |
| Minna Padi Investama |
| United Tractors Tbk |
Minna Padi and United Tractors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minna Padi and United Tractors
The main advantage of trading using opposite Minna Padi and United Tractors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minna Padi position performs unexpectedly, United Tractors 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 United Tractors will offset losses from the drop in United Tractors' 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 |
| United Tractors vs. Astra International Tbk | United Tractors vs. Bukit Asam Tbk | United Tractors vs. Semen Indonesia Persero | United Tractors vs. PT Indofood Sukses |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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