Correlation Between PT Mulia and Slj Global
Can any of the company-specific risk be diversified away by investing in both PT Mulia and Slj Global 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 PT Mulia and Slj Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Mulia Industrindo and Slj Global Tbk, you can compare the effects of market volatilities on PT Mulia and Slj Global 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 PT Mulia with a short position of Slj Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Mulia and Slj Global.
Diversification Opportunities for PT Mulia and Slj Global
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MLIA and Slj is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding PT Mulia Industrindo and Slj Global Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slj Global Tbk and PT Mulia 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 PT Mulia Industrindo are associated (or correlated) with Slj Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slj Global Tbk has no effect on the direction of PT Mulia i.e., PT Mulia and Slj Global go up and down completely randomly.
Pair Corralation between PT Mulia and Slj Global
Assuming the 90 days trading horizon PT Mulia Industrindo is expected to under-perform the Slj Global. But the stock apears to be less risky and, when comparing its historical volatility, PT Mulia Industrindo is 2.13 times less risky than Slj Global. The stock trades about -0.21 of its potential returns per unit of risk. The Slj Global Tbk is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 10,100 in Slj Global Tbk on September 8, 2024 and sell it today you would lose (1,200) from holding Slj Global Tbk or give up 11.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.44% |
Values | Daily Returns |
PT Mulia Industrindo vs. Slj Global Tbk
Performance |
Timeline |
PT Mulia Industrindo |
Slj Global Tbk |
PT Mulia and Slj Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Mulia and Slj Global
The main advantage of trading using opposite PT Mulia and Slj Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Mulia position performs unexpectedly, Slj Global 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 Slj Global will offset losses from the drop in Slj Global's long position.PT Mulia vs. Suparma Tbk | PT Mulia vs. Pelangi Indah Canindo | PT Mulia vs. Surya Toto Indonesia | PT Mulia vs. Lautan Luas Tbk |
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Check out your portfolio center.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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