Correlation Between Panca Budi and Mitrabara Adiperdana
Can any of the company-specific risk be diversified away by investing in both Panca Budi and Mitrabara Adiperdana 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 Panca Budi and Mitrabara Adiperdana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panca Budi Idaman and Mitrabara Adiperdana PT, you can compare the effects of market volatilities on Panca Budi and Mitrabara Adiperdana 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 Panca Budi with a short position of Mitrabara Adiperdana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panca Budi and Mitrabara Adiperdana.
Diversification Opportunities for Panca Budi and Mitrabara Adiperdana
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Panca and Mitrabara is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Panca Budi Idaman and Mitrabara Adiperdana PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabara Adiperdana and Panca Budi 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 Panca Budi Idaman are associated (or correlated) with Mitrabara Adiperdana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitrabara Adiperdana has no effect on the direction of Panca Budi i.e., Panca Budi and Mitrabara Adiperdana go up and down completely randomly.
Pair Corralation between Panca Budi and Mitrabara Adiperdana
Assuming the 90 days trading horizon Panca Budi Idaman is expected to generate 21.86 times more return on investment than Mitrabara Adiperdana. However, Panca Budi is 21.86 times more volatile than Mitrabara Adiperdana PT. It trades about 0.04 of its potential returns per unit of risk. Mitrabara Adiperdana PT is currently generating about -0.09 per unit of risk. If you would invest 33,959 in Panca Budi Idaman on November 19, 2024 and sell it today you would earn a total of 16,041 from holding Panca Budi Idaman or generate 47.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panca Budi Idaman vs. Mitrabara Adiperdana PT
Performance |
| Timeline |
| Panca Budi Idaman |
| Mitrabara Adiperdana |
Panca Budi and Mitrabara Adiperdana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panca Budi and Mitrabara Adiperdana
The main advantage of trading using opposite Panca Budi and Mitrabara Adiperdana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panca Budi position performs unexpectedly, Mitrabara Adiperdana 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 Mitrabara Adiperdana will offset losses from the drop in Mitrabara Adiperdana's long position.| Panca Budi vs. Mitrabara Adiperdana PT | Panca Budi vs. Mark Dynamics Indonesia | Panca Budi vs. Prodia Widyahusada Tbk | Panca Budi vs. Selamat Sempurna Tbk |
| Mitrabara Adiperdana vs. Baramulti Suksessarana Tbk | Mitrabara Adiperdana vs. Samindo Resources Tbk | Mitrabara Adiperdana vs. Hexindo Adiperkasa Tbk | Mitrabara Adiperdana vs. Mitra Pinasthika Mustika |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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