Correlation Between Mitrabara Adiperdana and Mitrabahtera Segara

Can any of the company-specific risk be diversified away by investing in both Mitrabara Adiperdana and Mitrabahtera Segara 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 Mitrabara Adiperdana and Mitrabahtera Segara into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mitrabara Adiperdana PT and Mitrabahtera Segara Sejati, you can compare the effects of market volatilities on Mitrabara Adiperdana and Mitrabahtera Segara 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 Mitrabara Adiperdana with a short position of Mitrabahtera Segara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabara Adiperdana and Mitrabahtera Segara.

Diversification Opportunities for Mitrabara Adiperdana and Mitrabahtera Segara

0.47

Correlation Coefficient

Mitrabara Adiperdana  Mitrabahtera Segara

Very weak diversification

The 3 months correlation between Mitrabara and Mitrabahtera is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabara Adiperdana PT and Mitrabahtera Segara Sejati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabahtera Segara and Mitrabara Adiperdana 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 Mitrabara Adiperdana PT are associated (or correlated) with Mitrabahtera Segara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitrabahtera Segara has no effect on the direction of Mitrabara Adiperdana i.e., Mitrabara Adiperdana and Mitrabahtera Segara go up and down completely randomly.

Pair Corralation between Mitrabara Adiperdana and Mitrabahtera Segara

Assuming the 90 days trading horizon Mitrabara Adiperdana PT is expected to under-perform the Mitrabahtera Segara. But the stock apears to be less risky and, when comparing its historical volatility, Mitrabara Adiperdana PT is 1.06 times less risky than Mitrabahtera Segara. The stock trades about -0.08 of its potential returns per unit of risk. The Mitrabahtera Segara Sejati is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  134,500  in Mitrabahtera Segara Sejati on September 12, 2024 and sell it today you would lose (26,000) from holding Mitrabahtera Segara Sejati or give up 19.33% of portfolio value over 90 days.

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

Mitrabara Adiperdana PT  vs.  Mitrabahtera Segara Sejati

Mitrabara Adiperdana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitrabara Adiperdana PT 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Mitrabahtera Segara

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mitrabahtera Segara Sejati are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Mitrabahtera Segara may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mitrabara Adiperdana and Mitrabahtera Segara

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

The idea behind Mitrabara Adiperdana PT and Mitrabahtera Segara Sejati 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.