Correlation Between Mitrabara Adiperdana and PT Sarimelati
Can any of the company-specific risk be diversified away by investing in both Mitrabara Adiperdana and PT Sarimelati 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 PT Sarimelati 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 PT Sarimelati Kencana, you can compare the effects of market volatilities on Mitrabara Adiperdana and PT Sarimelati 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 PT Sarimelati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabara Adiperdana and PT Sarimelati.
Diversification Opportunities for Mitrabara Adiperdana and PT Sarimelati
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mitrabara and PZZA is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabara Adiperdana PT and PT Sarimelati Kencana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarimelati Kencana 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 PT Sarimelati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarimelati Kencana has no effect on the direction of Mitrabara Adiperdana i.e., Mitrabara Adiperdana and PT Sarimelati go up and down completely randomly.
Pair Corralation between Mitrabara Adiperdana and PT Sarimelati
Assuming the 90 days trading horizon Mitrabara Adiperdana PT is expected to generate 0.92 times more return on investment than PT Sarimelati. However, Mitrabara Adiperdana PT is 1.08 times less risky than PT Sarimelati. It trades about 0.04 of its potential returns per unit of risk. PT Sarimelati Kencana is currently generating about -0.23 per unit of risk. If you would invest 264,000 in Mitrabara Adiperdana PT on September 15, 2024 and sell it today you would earn a total of 23,000 from holding Mitrabara Adiperdana PT or generate 8.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 99.21% |
Values | Daily Returns |
Mitrabara Adiperdana PT vs. PT Sarimelati Kencana
Performance |
Timeline |
Mitrabara Adiperdana |
PT Sarimelati Kencana |
Mitrabara Adiperdana and PT Sarimelati Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mitrabara Adiperdana and PT Sarimelati
The main advantage of trading using opposite Mitrabara Adiperdana and PT Sarimelati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitrabara Adiperdana position performs unexpectedly, PT Sarimelati 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 PT Sarimelati will offset losses from the drop in PT Sarimelati's long position.Mitrabara Adiperdana vs. Baramulti Suksessarana Tbk | Mitrabara Adiperdana vs. Samindo Resources Tbk | Mitrabara Adiperdana vs. Hexindo Adiperkasa Tbk | Mitrabara Adiperdana vs. Mitra Pinasthika Mustika |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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