Correlation Between Radiant Utama and Mitrabahtera Segara
Can any of the company-specific risk be diversified away by investing in both Radiant Utama and Mitrabahtera Segara 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 Radiant Utama and Mitrabahtera Segara into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radiant Utama Interinsco and Mitrabahtera Segara Sejati, you can compare the effects of market volatilities on Radiant Utama and Mitrabahtera Segara 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 Radiant Utama with a short position of Mitrabahtera Segara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radiant Utama and Mitrabahtera Segara.
Diversification Opportunities for Radiant Utama and Mitrabahtera Segara
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Radiant and Mitrabahtera is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Utama Interinsco and Mitrabahtera Segara Sejati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabahtera Segara and Radiant Utama 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 Radiant Utama Interinsco are associated (or correlated) with Mitrabahtera Segara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitrabahtera Segara has no effect on the direction of Radiant Utama i.e., Radiant Utama and Mitrabahtera Segara go up and down completely randomly.
Pair Corralation between Radiant Utama and Mitrabahtera Segara
Assuming the 90 days trading horizon Radiant Utama Interinsco is expected to generate 0.41 times more return on investment than Mitrabahtera Segara. However, Radiant Utama Interinsco is 2.42 times less risky than Mitrabahtera Segara. It trades about -0.19 of its potential returns per unit of risk. Mitrabahtera Segara Sejati is currently generating about -0.18 per unit of risk. If you would invest 17,900 in Radiant Utama Interinsco on September 1, 2024 and sell it today you would lose (700.00) from holding Radiant Utama Interinsco or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Radiant Utama Interinsco vs. Mitrabahtera Segara Sejati
Performance |
| Timeline |
| Radiant Utama Interinsco |
| Mitrabahtera Segara |
Radiant Utama and Mitrabahtera Segara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radiant Utama and Mitrabahtera Segara
The main advantage of trading using opposite Radiant Utama and Mitrabahtera Segara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radiant Utama position performs unexpectedly, Mitrabahtera Segara 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 Mitrabahtera Segara will offset losses from the drop in Mitrabahtera Segara's long position.| Radiant Utama vs. Mitrabahtera Segara Sejati | Radiant Utama vs. Weha Transportasi Indonesia | Radiant Utama vs. Rig Tenders Tbk | Radiant Utama vs. Rukun Raharja Tbk |
| Mitrabahtera Segara vs. Matahari Department Store | Mitrabahtera Segara vs. Multi Medika Internasional | Mitrabahtera Segara vs. Visi Media Asia | Mitrabahtera Segara vs. Bayan Resources Tbk |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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