Correlation Between MD Pictures and Mahaka Media

Can any of the company-specific risk be diversified away by investing in both MD Pictures and Mahaka Media 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 MD Pictures and Mahaka Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MD Pictures Tbk and Mahaka Media Tbk, you can compare the effects of market volatilities on MD Pictures and Mahaka Media 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 MD Pictures with a short position of Mahaka Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of MD Pictures and Mahaka Media.

Diversification Opportunities for MD Pictures and Mahaka Media

0.59

Correlation Coefficient

MD Pictures  Mahaka Media

Very weak diversification

The 3 months correlation between FILM and Mahaka is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding MD Pictures Tbk and Mahaka Media Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahaka Media Tbk and MD Pictures 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 MD Pictures Tbk are associated (or correlated) with Mahaka Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahaka Media Tbk has no effect on the direction of MD Pictures i.e., MD Pictures and Mahaka Media go up and down completely randomly.

Pair Corralation between MD Pictures and Mahaka Media

Assuming the 90 days trading horizon MD Pictures Tbk is expected to generate 0.89 times more return on investment than Mahaka Media. However, MD Pictures Tbk is 1.13 times less risky than Mahaka Media. It trades about -0.12 of its potential returns per unit of risk. Mahaka Media Tbk is currently generating about -0.15 per unit of risk. If you would invest  386,000  in MD Pictures Tbk on December 29, 2024 and sell it today you would lose (102,000) from holding MD Pictures Tbk or give up 26.42% of portfolio value over 90 days.

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

MD Pictures Tbk  vs.  Mahaka Media Tbk

MD Pictures Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days MD Pictures Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Mahaka Media Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mahaka Media Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with MD Pictures and Mahaka Media

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

The idea behind MD Pictures Tbk and Mahaka Media Tbk 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.