Correlation Between Mitrabahtera Segara and Pembangunan Jaya

Can any of the company-specific risk be diversified away by investing in both Mitrabahtera Segara and Pembangunan Jaya 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 Pembangunan Jaya 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 Pembangunan Jaya Ancol, you can compare the effects of market volatilities on Mitrabahtera Segara and Pembangunan Jaya 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 Pembangunan Jaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabahtera Segara and Pembangunan Jaya.

Diversification Opportunities for Mitrabahtera Segara and Pembangunan Jaya

0.4

Correlation Coefficient

Mitrabahtera Segara  Pembangunan Jaya

Very weak diversification

The 3 months correlation between Mitrabahtera and Pembangunan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabahtera Segara Sejati and Pembangunan Jaya Ancol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembangunan Jaya Ancol 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 Pembangunan Jaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembangunan Jaya Ancol has no effect on the direction of Mitrabahtera Segara i.e., Mitrabahtera Segara and Pembangunan Jaya go up and down completely randomly.

Pair Corralation between Mitrabahtera Segara and Pembangunan Jaya

Assuming the 90 days trading horizon Mitrabahtera Segara Sejati is expected to generate 3.04 times more return on investment than Pembangunan Jaya. However, Mitrabahtera Segara is 3.04 times more volatile than Pembangunan Jaya Ancol. It trades about 0.06 of its potential returns per unit of risk. Pembangunan Jaya Ancol is currently generating about -0.22 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  8,000  from holding Mitrabahtera Segara Sejati or generate 7.8% return on investment over 90 days.

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

Mitrabahtera Segara Sejati  vs.  Pembangunan Jaya Ancol

Mitrabahtera Segara

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mitrabahtera Segara Sejati are ranked lower than 4 (%) 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.

Pembangunan Jaya Ancol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pembangunan Jaya Ancol has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Mitrabahtera Segara and Pembangunan Jaya

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

The idea behind Mitrabahtera Segara Sejati and Pembangunan Jaya Ancol 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.