Correlation Between Mitra Pinasthika and Anugerah Kagum

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

By analyzing existing cross correlation between Mitra Pinasthika Mustika and Anugerah Kagum Karya, you can compare the effects of market volatilities on Mitra Pinasthika and Anugerah Kagum 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 Pinasthika with a short position of Anugerah Kagum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Anugerah Kagum.

Diversification Opportunities for Mitra Pinasthika and Anugerah Kagum

0.12

Correlation Coefficient

Mitra Pinasthika  Anugerah Kagum

Average diversification

The 3 months correlation between Mitra and Anugerah is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Anugerah Kagum Karya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anugerah Kagum Karya and Mitra Pinasthika 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 Pinasthika Mustika are associated (or correlated) with Anugerah Kagum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anugerah Kagum Karya has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Anugerah Kagum go up and down completely randomly.

Pair Corralation between Mitra Pinasthika and Anugerah Kagum

Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 13.33 times less return on investment than Anugerah Kagum. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 3.56 times less risky than Anugerah Kagum. It trades about 0.01 of its potential returns per unit of risk. Anugerah Kagum Karya is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,400  in Anugerah Kagum Karya on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Anugerah Kagum Karya or generate 7.14% return on investment over 90 days.

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

Mitra Pinasthika Mustika  vs.  Anugerah Kagum Karya

Mitra Pinasthika Mustika

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mitra Pinasthika Mustika are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Mitra Pinasthika is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Anugerah Kagum Karya

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anugerah Kagum Karya are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Anugerah Kagum may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mitra Pinasthika and Anugerah Kagum

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

The idea behind Mitra Pinasthika Mustika and Anugerah Kagum Karya 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 Transaction History module to view history of all your transactions and understand their impact on performance.