Correlation Between Trans Power and Protech Mitra
Can any of the company-specific risk be diversified away by investing in both Trans Power and Protech Mitra 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 Trans Power and Protech Mitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trans Power Marine and Protech Mitra Perkasa, you can compare the effects of market volatilities on Trans Power and Protech Mitra 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 Trans Power with a short position of Protech Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trans Power and Protech Mitra.
Diversification Opportunities for Trans Power and Protech Mitra
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Trans and Protech is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Trans Power Marine and Protech Mitra Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protech Mitra Perkasa and Trans Power 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 Trans Power Marine are associated (or correlated) with Protech Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protech Mitra Perkasa has no effect on the direction of Trans Power i.e., Trans Power and Protech Mitra go up and down completely randomly.
Pair Corralation between Trans Power and Protech Mitra
Assuming the 90 days trading horizon Trans Power Marine is expected to generate 0.66 times more return on investment than Protech Mitra. However, Trans Power Marine is 1.52 times less risky than Protech Mitra. It trades about 0.06 of its potential returns per unit of risk. Protech Mitra Perkasa is currently generating about 0.01 per unit of risk. If you would invest 41,858 in Trans Power Marine on August 28, 2024 and sell it today you would earn a total of 23,642 from holding Trans Power Marine or generate 56.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trans Power Marine vs. Protech Mitra Perkasa
Performance |
| Timeline |
| Trans Power Marine |
| Protech Mitra Perkasa |
Trans Power and Protech Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trans Power and Protech Mitra
The main advantage of trading using opposite Trans Power and Protech Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trans Power position performs unexpectedly, Protech Mitra 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 Protech Mitra will offset losses from the drop in Protech Mitra's long position.| Trans Power vs. Pelayaran Nelly Dwi | Trans Power vs. Wintermar Offshore Marine | Trans Power vs. Pelita Samudera Shipping | Trans Power vs. Samudera Indonesia Tbk |
| Protech Mitra vs. Pelayaran Nelly Dwi | Protech Mitra vs. Trans Power Marine | Protech Mitra vs. Sidomulyo Selaras Tbk | Protech Mitra vs. Bali Towerindo Sentra |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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