Correlation Between Transcoal Pacific and PT Mandiri
Can any of the company-specific risk be diversified away by investing in both Transcoal Pacific and PT Mandiri 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 Transcoal Pacific and PT Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcoal Pacific Tbk and PT Mandiri Herindo, you can compare the effects of market volatilities on Transcoal Pacific and PT Mandiri 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 Transcoal Pacific with a short position of PT Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcoal Pacific and PT Mandiri.
Diversification Opportunities for Transcoal Pacific and PT Mandiri
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transcoal and MAHA is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Transcoal Pacific Tbk and PT Mandiri Herindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Mandiri Herindo and Transcoal Pacific 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 Transcoal Pacific Tbk are associated (or correlated) with PT Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Mandiri Herindo has no effect on the direction of Transcoal Pacific i.e., Transcoal Pacific and PT Mandiri go up and down completely randomly.
Pair Corralation between Transcoal Pacific and PT Mandiri
Assuming the 90 days trading horizon Transcoal Pacific Tbk is expected to generate 0.62 times more return on investment than PT Mandiri. However, Transcoal Pacific Tbk is 1.62 times less risky than PT Mandiri. It trades about 0.47 of its potential returns per unit of risk. PT Mandiri Herindo is currently generating about -0.14 per unit of risk. If you would invest 645,000 in Transcoal Pacific Tbk on November 28, 2024 and sell it today you would earn a total of 55,000 from holding Transcoal Pacific Tbk or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcoal Pacific Tbk vs. PT Mandiri Herindo
Performance |
| Timeline |
| Transcoal Pacific Tbk |
| PT Mandiri Herindo |
Transcoal Pacific and PT Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcoal Pacific and PT Mandiri
The main advantage of trading using opposite Transcoal Pacific and PT Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcoal Pacific position performs unexpectedly, PT Mandiri 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 PT Mandiri will offset losses from the drop in PT Mandiri's long position.| Transcoal Pacific vs. Bank Tabungan Pensiunan | Transcoal Pacific vs. Chandra Asri Petrochemical | Transcoal Pacific vs. Mitra Keluarga Karyasehat | Transcoal Pacific vs. Merdeka Copper Gold |
| PT Mandiri vs. Arkadia Digital Media | PT Mandiri vs. Optima Prima Metal | PT Mandiri vs. Dyandra Media International | PT Mandiri vs. Smartfren Telecom 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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