Correlation Between Mandom Indonesia and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both Mandom Indonesia and Trias Sentosa 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 Mandom Indonesia and Trias Sentosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mandom Indonesia Tbk and Trias Sentosa Tbk, you can compare the effects of market volatilities on Mandom Indonesia and Trias Sentosa 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 Mandom Indonesia with a short position of Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mandom Indonesia and Trias Sentosa.
Diversification Opportunities for Mandom Indonesia and Trias Sentosa
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mandom and Trias is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Mandom Indonesia Tbk and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa Tbk and Mandom Indonesia 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 Mandom Indonesia Tbk are associated (or correlated) with Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Mandom Indonesia i.e., Mandom Indonesia and Trias Sentosa go up and down completely randomly.
Pair Corralation between Mandom Indonesia and Trias Sentosa
Assuming the 90 days trading horizon Mandom Indonesia Tbk is expected to under-perform the Trias Sentosa. In addition to that, Mandom Indonesia is 1.99 times more volatile than Trias Sentosa Tbk. It trades about -0.11 of its total potential returns per unit of risk. Trias Sentosa Tbk is currently generating about -0.07 per unit of volatility. If you would invest 49,800 in Trias Sentosa Tbk on September 2, 2024 and sell it today you would lose (800.00) from holding Trias Sentosa Tbk or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mandom Indonesia Tbk vs. Trias Sentosa Tbk
Performance |
| Timeline |
| Mandom Indonesia Tbk |
| Trias Sentosa Tbk |
Mandom Indonesia and Trias Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mandom Indonesia and Trias Sentosa
The main advantage of trading using opposite Mandom Indonesia and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mandom Indonesia position performs unexpectedly, Trias Sentosa 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 Trias Sentosa will offset losses from the drop in Trias Sentosa's long position.| Mandom Indonesia vs. Bank BRISyariah Tbk | Mandom Indonesia vs. Mitra Pinasthika Mustika | Mandom Indonesia vs. Jakarta Int Hotels | Mandom Indonesia vs. Indosterling Technomedia Tbk |
| Trias Sentosa vs. Suparma Tbk | Trias Sentosa vs. Champion Pacific Indonesia | Trias Sentosa vs. Indo Acidatama Tbk | Trias Sentosa vs. Unggul Indah Cahaya |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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