Correlation Between Bhakti Multi and Mitra Keluarga

Can any of the company-specific risk be diversified away by investing in both Bhakti Multi and Mitra Keluarga 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 Bhakti Multi and Mitra Keluarga into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bhakti Multi Artha and Mitra Keluarga Karyasehat, you can compare the effects of market volatilities on Bhakti Multi and Mitra Keluarga 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 Bhakti Multi with a short position of Mitra Keluarga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bhakti Multi and Mitra Keluarga.

Diversification Opportunities for Bhakti Multi and Mitra Keluarga

-0.26

Correlation Coefficient

Bhakti Multi  Mitra Keluarga

Very good diversification

The 3 months correlation between Bhakti and Mitra is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bhakti Multi Artha and Mitra Keluarga Karyasehat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitra Keluarga Karyasehat and Bhakti Multi 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 Bhakti Multi Artha are associated (or correlated) with Mitra Keluarga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitra Keluarga Karyasehat has no effect on the direction of Bhakti Multi i.e., Bhakti Multi and Mitra Keluarga go up and down completely randomly.

Pair Corralation between Bhakti Multi and Mitra Keluarga

Assuming the 90 days trading horizon Bhakti Multi Artha is expected to generate 0.46 times more return on investment than Mitra Keluarga. However, Bhakti Multi Artha is 2.18 times less risky than Mitra Keluarga. It trades about 0.14 of its potential returns per unit of risk. Mitra Keluarga Karyasehat is currently generating about -0.08 per unit of risk. If you would invest  46,200  in Bhakti Multi Artha on December 30, 2024 and sell it today you would earn a total of  4,300  from holding Bhakti Multi Artha or generate 9.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bhakti Multi Artha  vs.  Mitra Keluarga Karyasehat

Bhakti Multi Artha

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bhakti Multi Artha are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Bhakti Multi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mitra Keluarga Karyasehat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mitra Keluarga Karyasehat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Bhakti Multi and Mitra Keluarga

The main advantage of trading using opposite Bhakti Multi and Mitra Keluarga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bhakti Multi position performs unexpectedly, Mitra Keluarga 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 Mitra Keluarga will offset losses from the drop in Mitra Keluarga's long position.

The idea behind Bhakti Multi Artha and Mitra Keluarga Karyasehat pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.