Correlation Between Tempo Scan and Mustika Ratu
Can any of the company-specific risk be diversified away by investing in both Tempo Scan and Mustika Ratu 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 Tempo Scan and Mustika Ratu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tempo Scan Pacific and Mustika Ratu Tbk, you can compare the effects of market volatilities on Tempo Scan and Mustika Ratu 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 Tempo Scan with a short position of Mustika Ratu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tempo Scan and Mustika Ratu.
Diversification Opportunities for Tempo Scan and Mustika Ratu
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tempo and Mustika is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tempo Scan Pacific and Mustika Ratu Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustika Ratu Tbk and Tempo Scan 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 Tempo Scan Pacific are associated (or correlated) with Mustika Ratu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustika Ratu Tbk has no effect on the direction of Tempo Scan i.e., Tempo Scan and Mustika Ratu go up and down completely randomly.
Pair Corralation between Tempo Scan and Mustika Ratu
Assuming the 90 days trading horizon Tempo Scan Pacific is expected to generate 0.4 times more return on investment than Mustika Ratu. However, Tempo Scan Pacific is 2.52 times less risky than Mustika Ratu. It trades about -0.3 of its potential returns per unit of risk. Mustika Ratu Tbk is currently generating about -0.3 per unit of risk. If you would invest 273,000 in Tempo Scan Pacific on August 27, 2024 and sell it today you would lose (16,000) from holding Tempo Scan Pacific or give up 5.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tempo Scan Pacific vs. Mustika Ratu Tbk
Performance |
| Timeline |
| Tempo Scan Pacific |
| Mustika Ratu Tbk |
Tempo Scan and Mustika Ratu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tempo Scan and Mustika Ratu
The main advantage of trading using opposite Tempo Scan and Mustika Ratu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tempo Scan position performs unexpectedly, Mustika Ratu 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 Mustika Ratu will offset losses from the drop in Mustika Ratu's long position.| Tempo Scan vs. Astra Graphia Tbk | Tempo Scan vs. Hexindo Adiperkasa Tbk | Tempo Scan vs. Lautan Luas Tbk | Tempo Scan vs. Citra Marga Nusaphala |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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