Correlation Between Mitrabahtera Segara and Surya Toto

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

Diversification Opportunities for Mitrabahtera Segara and Surya Toto

0.09

Correlation Coefficient

Mitrabahtera Segara  Surya Toto

Significant diversification

The 3 months correlation between Mitrabahtera and Surya is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabahtera Segara Sejati and Surya Toto Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Toto Indonesia 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 Surya Toto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Toto Indonesia has no effect on the direction of Mitrabahtera Segara i.e., Mitrabahtera Segara and Surya Toto go up and down completely randomly.

Pair Corralation between Mitrabahtera Segara and Surya Toto

Assuming the 90 days trading horizon Mitrabahtera Segara Sejati is expected to generate 1.61 times more return on investment than Surya Toto. However, Mitrabahtera Segara is 1.61 times more volatile than Surya Toto Indonesia. It trades about 0.01 of its potential returns per unit of risk. Surya Toto Indonesia is currently generating about -0.12 per unit of risk. If you would invest  100,000  in Mitrabahtera Segara Sejati on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Mitrabahtera Segara Sejati or generate 0.0% return on investment over 90 days.

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

Mitrabahtera Segara Sejati  vs.  Surya Toto Indonesia

Mitrabahtera Segara

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mitrabahtera Segara Sejati has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Mitrabahtera Segara is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Surya Toto Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Surya Toto Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting 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 Surya Toto

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

The idea behind Mitrabahtera Segara Sejati and Surya Toto Indonesia 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.