Correlation Between Repower Asia and Mandala Multifinance
Can any of the company-specific risk be diversified away by investing in both Repower Asia and Mandala Multifinance 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 Repower Asia and Mandala Multifinance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repower Asia Indonesia and Mandala Multifinance Tbk, you can compare the effects of market volatilities on Repower Asia and Mandala Multifinance 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 Repower Asia with a short position of Mandala Multifinance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repower Asia and Mandala Multifinance.
Diversification Opportunities for Repower Asia and Mandala Multifinance
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Repower and Mandala is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Repower Asia Indonesia and Mandala Multifinance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mandala Multifinance Tbk and Repower Asia 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 Repower Asia Indonesia are associated (or correlated) with Mandala Multifinance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mandala Multifinance Tbk has no effect on the direction of Repower Asia i.e., Repower Asia and Mandala Multifinance go up and down completely randomly.
Pair Corralation between Repower Asia and Mandala Multifinance
Assuming the 90 days trading horizon Repower Asia Indonesia is expected to generate 2.93 times more return on investment than Mandala Multifinance. However, Repower Asia is 2.93 times more volatile than Mandala Multifinance Tbk. It trades about 0.02 of its potential returns per unit of risk. Mandala Multifinance Tbk is currently generating about -0.07 per unit of risk. If you would invest 800.00 in Repower Asia Indonesia on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Repower Asia Indonesia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Repower Asia Indonesia vs. Mandala Multifinance Tbk
Performance |
| Timeline |
| Repower Asia Indonesia |
| Mandala Multifinance Tbk |
Repower Asia and Mandala Multifinance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repower Asia and Mandala Multifinance
The main advantage of trading using opposite Repower Asia and Mandala Multifinance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repower Asia position performs unexpectedly, Mandala Multifinance 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 Mandala Multifinance will offset losses from the drop in Mandala Multifinance's long position.| Repower Asia vs. Bumi Benowo Sukses | Repower Asia vs. Andalan Sakti Primaindo | Repower Asia vs. Bhakti Multi Artha | Repower Asia vs. Greenwood Sejahtera Tbk |
| Mandala Multifinance vs. Paninvest Tbk | Mandala Multifinance vs. Maskapai Reasuransi Indonesia | Mandala Multifinance vs. Panin Sekuritas Tbk | Mandala Multifinance vs. Wahana Ottomitra Multiartha |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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