Correlation Between Marcus and Indo Tambangraya

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

By analyzing existing cross correlation between Marcus and Indo Tambangraya Megah, you can compare the effects of market volatilities on Marcus and Indo Tambangraya 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 Marcus with a short position of Indo Tambangraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcus and Indo Tambangraya.

Diversification Opportunities for Marcus and Indo Tambangraya

0.65

Correlation Coefficient

Marcus  Indo Tambangraya

Poor diversification

The 3 months correlation between Marcus and Indo is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Indo Tambangraya Megah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Tambangraya Megah and Marcus 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 Marcus are associated (or correlated) with Indo Tambangraya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Tambangraya Megah has no effect on the direction of Marcus i.e., Marcus and Indo Tambangraya go up and down completely randomly.

Pair Corralation between Marcus and Indo Tambangraya

Considering the 90-day investment horizon Marcus is expected to under-perform the Indo Tambangraya. But the stock apears to be less risky and, when comparing its historical volatility, Marcus is 1.37 times less risky than Indo Tambangraya. The stock trades about -0.13 of its potential returns per unit of risk. The Indo Tambangraya Megah is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  335.00  in Indo Tambangraya Megah on December 28, 2024 and sell it today you would lose (50.00) from holding Indo Tambangraya Megah or give up 14.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Marcus  vs.  Indo Tambangraya Megah

Marcus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marcus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Indo Tambangraya Megah

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indo Tambangraya Megah has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Marcus and Indo Tambangraya

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

The idea behind Marcus and Indo Tambangraya Megah 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.