Correlation Between PT Mulia and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both PT Mulia and Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa Tbk, you can compare the effects of market volatilities on PT Mulia and Trias Sentosa 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 Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Mulia and Trias Sentosa.
Diversification Opportunities for PT Mulia and Trias Sentosa
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MLIA and Trias is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding PT Mulia Industrindo and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa 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 Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of PT Mulia i.e., PT Mulia and Trias Sentosa go up and down completely randomly.
Pair Corralation between PT Mulia and Trias Sentosa
Assuming the 90 days trading horizon PT Mulia Industrindo is expected to under-perform the Trias Sentosa. But the stock apears to be less risky and, when comparing its historical volatility, PT Mulia Industrindo is 1.43 times less risky than Trias Sentosa. The stock trades about -0.16 of its potential returns per unit of risk. The Trias Sentosa Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 49,800 in Trias Sentosa Tbk on September 5, 2024 and sell it today you would earn a total of 200.00 from holding Trias Sentosa Tbk or generate 0.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
PT Mulia Industrindo vs. Trias Sentosa Tbk
Performance |
Timeline |
PT Mulia Industrindo |
Trias Sentosa Tbk |
PT Mulia and Trias Sentosa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Mulia and Trias Sentosa
The main advantage of trading using opposite PT Mulia and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Mulia position performs unexpectedly, Trias Sentosa 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 Trias Sentosa will offset losses from the drop in Trias Sentosa'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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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