Correlation Between Mitrabahtera Segara and Citatah Tbk

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

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

Diversification Opportunities for Mitrabahtera Segara and Citatah Tbk

0.25

Correlation Coefficient

Mitrabahtera Segara  Citatah Tbk

Modest diversification

The 3 months correlation between Mitrabahtera and Citatah is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabahtera Segara Sejati and Citatah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citatah Tbk and Mitrabahtera Segara 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 Mitrabahtera Segara Sejati are associated (or correlated) with Citatah Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citatah Tbk has no effect on the direction of Mitrabahtera Segara i.e., Mitrabahtera Segara and Citatah Tbk go up and down completely randomly.

Pair Corralation between Mitrabahtera Segara and Citatah Tbk

Assuming the 90 days trading horizon Mitrabahtera Segara Sejati is expected to generate 0.92 times more return on investment than Citatah Tbk. However, Mitrabahtera Segara Sejati is 1.08 times less risky than Citatah Tbk. It trades about 0.05 of its potential returns per unit of risk. Citatah Tbk is currently generating about -0.09 per unit of risk. If you would invest  102,500  in Mitrabahtera Segara Sejati on September 12, 2024 and sell it today you would earn a total of  6,000  from holding Mitrabahtera Segara Sejati or generate 5.85% return on investment over 90 days.

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

Mitrabahtera Segara Sejati  vs.  Citatah Tbk

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.

Citatah Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mitrabahtera Segara and Citatah Tbk

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

The idea behind Mitrabahtera Segara Sejati and Citatah 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.