Correlation Between Menteng Heritage and Sanurhasta Mitra

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

By analyzing existing cross correlation between Menteng Heritage Realty and Sanurhasta Mitra PT, you can compare the effects of market volatilities on Menteng Heritage and Sanurhasta 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 Menteng Heritage with a short position of Sanurhasta Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Menteng Heritage and Sanurhasta Mitra.

Diversification Opportunities for Menteng Heritage and Sanurhasta Mitra

0.58

Correlation Coefficient

Menteng Heritage  Sanurhasta Mitra

Very weak diversification

The 3 months correlation between Menteng and Sanurhasta is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Menteng Heritage Realty and Sanurhasta Mitra PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanurhasta Mitra and Menteng Heritage 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 Menteng Heritage Realty are associated (or correlated) with Sanurhasta Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanurhasta Mitra has no effect on the direction of Menteng Heritage i.e., Menteng Heritage and Sanurhasta Mitra go up and down completely randomly.

Pair Corralation between Menteng Heritage and Sanurhasta Mitra

Assuming the 90 days trading horizon Menteng Heritage Realty is expected to generate 0.83 times more return on investment than Sanurhasta Mitra. However, Menteng Heritage Realty is 1.2 times less risky than Sanurhasta Mitra. It trades about 0.19 of its potential returns per unit of risk. Sanurhasta Mitra PT is currently generating about 0.13 per unit of risk. If you would invest  1,900  in Menteng Heritage Realty on September 1, 2024 and sell it today you would earn a total of  2,700  from holding Menteng Heritage Realty or generate 142.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.21%
Values	Daily Returns

Menteng Heritage Realty  vs.  Sanurhasta Mitra PT

Menteng Heritage Realty

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Menteng Heritage Realty are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Menteng Heritage disclosed solid returns over the last few months and may actually be approaching a breakup point.

Sanurhasta Mitra

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sanurhasta Mitra PT are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Sanurhasta Mitra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Menteng Heritage and Sanurhasta Mitra

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

The idea behind Menteng Heritage Realty and Sanurhasta Mitra PT 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..