Correlation Between Unggul Indah and Mark Dynamics
Can any of the company-specific risk be diversified away by investing in both Unggul Indah and Mark Dynamics 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 Unggul Indah and Mark Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unggul Indah Cahaya and Mark Dynamics Indonesia, you can compare the effects of market volatilities on Unggul Indah and Mark Dynamics 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 Unggul Indah with a short position of Mark Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unggul Indah and Mark Dynamics.
Diversification Opportunities for Unggul Indah and Mark Dynamics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Unggul and Mark is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Unggul Indah Cahaya and Mark Dynamics Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mark Dynamics Indonesia and Unggul Indah 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 Unggul Indah Cahaya are associated (or correlated) with Mark Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mark Dynamics Indonesia has no effect on the direction of Unggul Indah i.e., Unggul Indah and Mark Dynamics go up and down completely randomly.
Pair Corralation between Unggul Indah and Mark Dynamics
Assuming the 90 days trading horizon Unggul Indah Cahaya is expected to generate 0.2 times more return on investment than Mark Dynamics. However, Unggul Indah Cahaya is 4.93 times less risky than Mark Dynamics. It trades about -0.3 of its potential returns per unit of risk. Mark Dynamics Indonesia is currently generating about -0.11 per unit of risk. If you would invest 820,000 in Unggul Indah Cahaya on August 28, 2024 and sell it today you would lose (25,000) from holding Unggul Indah Cahaya or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unggul Indah Cahaya vs. Mark Dynamics Indonesia
Performance |
| Timeline |
| Unggul Indah Cahaya |
| Mark Dynamics Indonesia |
Unggul Indah and Mark Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unggul Indah and Mark Dynamics
The main advantage of trading using opposite Unggul Indah and Mark Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unggul Indah position performs unexpectedly, Mark Dynamics 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 Mark Dynamics will offset losses from the drop in Mark Dynamics' long position.| Unggul Indah vs. Kedaung Indah Can | Unggul Indah vs. Langgeng Makmur Industri | Unggul Indah vs. Kabelindo Murni Tbk | Unggul Indah vs. Mustika Ratu 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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