Correlation Between M Cash and Indosterling Technomedia

Can any of the company-specific risk be diversified away by investing in both M Cash and Indosterling Technomedia 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 M Cash and Indosterling Technomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between M Cash Integrasi and Indosterling Technomedia Tbk, you can compare the effects of market volatilities on M Cash and Indosterling Technomedia 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 M Cash with a short position of Indosterling Technomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Cash and Indosterling Technomedia.

Diversification Opportunities for M Cash and Indosterling Technomedia

0.0

Correlation Coefficient

M Cash  Indosterling Technomedia

Pay attention - limited upside

The 3 months correlation between MCAS and Indosterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding M Cash Integrasi and Indosterling Technomedia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosterling Technomedia and M Cash 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 M Cash Integrasi are associated (or correlated) with Indosterling Technomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosterling Technomedia has no effect on the direction of M Cash i.e., M Cash and Indosterling Technomedia go up and down completely randomly.

Pair Corralation between M Cash and Indosterling Technomedia

If you would invest  104,000  in M Cash Integrasi on September 1, 2024 and sell it today you would earn a total of  8,500  from holding M Cash Integrasi or generate 8.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

M Cash Integrasi  vs.  Indosterling Technomedia Tbk

M Cash Integrasi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in M Cash Integrasi are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, M Cash may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Indosterling Technomedia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with M Cash and Indosterling Technomedia

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

The idea behind M Cash Integrasi and Indosterling Technomedia 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.