Correlation Between Victoria Insurance and Protech Mitra
Can any of the company-specific risk be diversified away by investing in both Victoria Insurance 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 Victoria Insurance and Protech Mitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victoria Insurance Tbk and Protech Mitra Perkasa, you can compare the effects of market volatilities on Victoria Insurance 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 Victoria Insurance with a short position of Protech Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victoria Insurance and Protech Mitra.
Diversification Opportunities for Victoria Insurance and Protech Mitra
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Victoria and Protech is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Victoria Insurance Tbk 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 Victoria Insurance 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 Victoria Insurance Tbk 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 Victoria Insurance i.e., Victoria Insurance and Protech Mitra go up and down completely randomly.
Pair Corralation between Victoria Insurance and Protech Mitra
Assuming the 90 days trading horizon Victoria Insurance Tbk is expected to under-perform the Protech Mitra. But the stock apears to be less risky and, when comparing its historical volatility, Victoria Insurance Tbk is 1.64 times less risky than Protech Mitra. The stock trades about -0.13 of its potential returns per unit of risk. The Protech Mitra Perkasa is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 15,100 in Protech Mitra Perkasa on September 3, 2024 and sell it today you would lose (1,500) from holding Protech Mitra Perkasa or give up 9.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victoria Insurance Tbk vs. Protech Mitra Perkasa
Performance |
| Timeline |
| Victoria Insurance Tbk |
| Protech Mitra Perkasa |
Victoria Insurance and Protech Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victoria Insurance and Protech Mitra
The main advantage of trading using opposite Victoria Insurance and Protech Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victoria Insurance 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.| Victoria Insurance vs. Paninvest Tbk | Victoria Insurance vs. Mitra Pinasthika Mustika | Victoria Insurance vs. Jakarta Int Hotels | Victoria Insurance vs. Asuransi Harta Aman |
| Protech Mitra vs. Intanwijaya Internasional Tbk | Protech Mitra vs. Champion Pacific Indonesia | Protech Mitra vs. Mitra Pinasthika Mustika | Protech Mitra vs. Jakarta Int Hotels |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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