Correlation Between Prodia Widyahusada and Mitrabara Adiperdana
Can any of the company-specific risk be diversified away by investing in both Prodia Widyahusada 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 Prodia Widyahusada and Mitrabara Adiperdana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prodia Widyahusada Tbk and Mitrabara Adiperdana PT, you can compare the effects of market volatilities on Prodia Widyahusada 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 Prodia Widyahusada with a short position of Mitrabara Adiperdana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prodia Widyahusada and Mitrabara Adiperdana.
Diversification Opportunities for Prodia Widyahusada and Mitrabara Adiperdana
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prodia and Mitrabara is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Prodia Widyahusada Tbk and Mitrabara Adiperdana PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabara Adiperdana and Prodia Widyahusada 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 Prodia Widyahusada Tbk 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 Prodia Widyahusada i.e., Prodia Widyahusada and Mitrabara Adiperdana go up and down completely randomly.
Pair Corralation between Prodia Widyahusada and Mitrabara Adiperdana
Assuming the 90 days trading horizon Prodia Widyahusada Tbk is expected to generate 1.22 times more return on investment than Mitrabara Adiperdana. However, Prodia Widyahusada is 1.22 times more volatile than Mitrabara Adiperdana PT. It trades about -0.16 of its potential returns per unit of risk. Mitrabara Adiperdana PT is currently generating about -0.44 per unit of risk. If you would invest 294,000 in Prodia Widyahusada Tbk on August 28, 2024 and sell it today you would lose (15,000) from holding Prodia Widyahusada Tbk or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prodia Widyahusada Tbk vs. Mitrabara Adiperdana PT
Performance |
| Timeline |
| Prodia Widyahusada Tbk |
| Mitrabara Adiperdana |
Prodia Widyahusada and Mitrabara Adiperdana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prodia Widyahusada and Mitrabara Adiperdana
The main advantage of trading using opposite Prodia Widyahusada and Mitrabara Adiperdana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prodia Widyahusada 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.| Prodia Widyahusada vs. Astra Graphia Tbk | Prodia Widyahusada vs. Hexindo Adiperkasa Tbk | Prodia Widyahusada vs. Lautan Luas Tbk | Prodia Widyahusada vs. Citra Marga Nusaphala |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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