Correlation Between Natura City and Mitra Pinasthika
Can any of the company-specific risk be diversified away by investing in both Natura City and Mitra Pinasthika 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 Natura City and Mitra Pinasthika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natura City Developments and Mitra Pinasthika Mustika, you can compare the effects of market volatilities on Natura City and Mitra Pinasthika 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 Natura City with a short position of Mitra Pinasthika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natura City and Mitra Pinasthika.
Diversification Opportunities for Natura City and Mitra Pinasthika
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Natura and Mitra is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Natura City Developments and Mitra Pinasthika Mustika in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitra Pinasthika Mustika and Natura City 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 Natura City Developments are associated (or correlated) with Mitra Pinasthika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitra Pinasthika Mustika has no effect on the direction of Natura City i.e., Natura City and Mitra Pinasthika go up and down completely randomly.
Pair Corralation between Natura City and Mitra Pinasthika
Assuming the 90 days trading horizon Natura City Developments is expected to generate 16.36 times more return on investment than Mitra Pinasthika. However, Natura City is 16.36 times more volatile than Mitra Pinasthika Mustika. It trades about 0.12 of its potential returns per unit of risk. Mitra Pinasthika Mustika is currently generating about -0.09 per unit of risk. If you would invest 8,700 in Natura City Developments on September 6, 2024 and sell it today you would earn a total of 5,100 from holding Natura City Developments or generate 58.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Natura City Developments vs. Mitra Pinasthika Mustika
Performance |
Timeline |
Natura City Developments |
Mitra Pinasthika Mustika |
Natura City and Mitra Pinasthika Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Natura City and Mitra Pinasthika
The main advantage of trading using opposite Natura City and Mitra Pinasthika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natura City position performs unexpectedly, Mitra Pinasthika 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 Pinasthika will offset losses from the drop in Mitra Pinasthika's long position.Natura City vs. Mitra Pinasthika Mustika | Natura City vs. Jakarta Int Hotels | Natura City vs. Asuransi Harta Aman | Natura City vs. Indosterling Technomedia Tbk |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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