Correlation Between Mitra Keluarga and Tower Bersama

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

By analyzing existing cross correlation between Mitra Keluarga Karyasehat and Tower Bersama Infrastructure, you can compare the effects of market volatilities on Mitra Keluarga and Tower Bersama 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 Mitra Keluarga with a short position of Tower Bersama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Keluarga and Tower Bersama.

Diversification Opportunities for Mitra Keluarga and Tower Bersama

0.48

Correlation Coefficient

Mitra Keluarga  Tower Bersama

Very weak diversification

The 3 months correlation between Mitra and Tower is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Keluarga Karyasehat and Tower Bersama Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Bersama Infras and Mitra Keluarga 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 Mitra Keluarga Karyasehat are associated (or correlated) with Tower Bersama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Bersama Infras has no effect on the direction of Mitra Keluarga i.e., Mitra Keluarga and Tower Bersama go up and down completely randomly.

Pair Corralation between Mitra Keluarga and Tower Bersama

Assuming the 90 days trading horizon Mitra Keluarga Karyasehat is expected to under-perform the Tower Bersama. In addition to that, Mitra Keluarga is 1.92 times more volatile than Tower Bersama Infrastructure. It trades about -0.08 of its total potential returns per unit of risk. Tower Bersama Infrastructure is currently generating about -0.07 per unit of volatility. If you would invest  210,000  in Tower Bersama Infrastructure on December 30, 2024 and sell it today you would lose (11,000) from holding Tower Bersama Infrastructure or give up 5.24% of portfolio value over 90 days.

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

Mitra Keluarga Karyasehat  vs.  Tower Bersama Infrastructure

Mitra Keluarga Karyasehat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mitra Keluarga Karyasehat 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.

Tower Bersama Infras

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tower Bersama Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Tower Bersama 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 Mitra Keluarga and Tower Bersama

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

The idea behind Mitra Keluarga Karyasehat and Tower Bersama Infrastructure 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.