Correlation Between Perusahaan Gas and Madusari Murni
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas and Madusari Murni 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 Perusahaan Gas and Madusari Murni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Gas Negara and Madusari Murni Indah, you can compare the effects of market volatilities on Perusahaan Gas and Madusari Murni 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 Perusahaan Gas with a short position of Madusari Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Madusari Murni.
Diversification Opportunities for Perusahaan Gas and Madusari Murni
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Perusahaan and Madusari is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara and Madusari Murni Indah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madusari Murni Indah and Perusahaan Gas 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 Perusahaan Gas Negara are associated (or correlated) with Madusari Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madusari Murni Indah has no effect on the direction of Perusahaan Gas i.e., Perusahaan Gas and Madusari Murni go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Madusari Murni
Assuming the 90 days trading horizon Perusahaan Gas Negara is expected to generate 0.9 times more return on investment than Madusari Murni. However, Perusahaan Gas Negara is 1.11 times less risky than Madusari Murni. It trades about -0.01 of its potential returns per unit of risk. Madusari Murni Indah is currently generating about -0.11 per unit of risk. If you would invest 154,500 in Perusahaan Gas Negara on September 2, 2024 and sell it today you would lose (2,000) from holding Perusahaan Gas Negara or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Madusari Murni Indah
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Madusari Murni Indah |
Perusahaan Gas and Madusari Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Madusari Murni
The main advantage of trading using opposite Perusahaan Gas and Madusari Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas position performs unexpectedly, Madusari Murni 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 Madusari Murni will offset losses from the drop in Madusari Murni's long position.| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International Tbk |
| Madusari Murni vs. Emdeki Utama Tbk | Madusari Murni vs. Kirana Megatara Tbk | Madusari Murni vs. Mahkota Group Tbk | Madusari Murni vs. Sriwahana |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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