Correlation Between Mitra Pinasthika and Ladangbaja Murni

Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Ladangbaja Murni 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 Ladangbaja Murni 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 Ladangbaja Murni PT, you can compare the effects of market volatilities on Mitra Pinasthika and Ladangbaja Murni 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 Ladangbaja Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Ladangbaja Murni.

Diversification Opportunities for Mitra Pinasthika and Ladangbaja Murni

0.75

Correlation Coefficient

Mitra Pinasthika  Ladangbaja Murni

Poor diversification

The 3 months correlation between Mitra and Ladangbaja is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Ladangbaja Murni PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladangbaja Murni 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 Ladangbaja Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladangbaja Murni has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Ladangbaja Murni go up and down completely randomly.

Pair Corralation between Mitra Pinasthika and Ladangbaja Murni

Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 26.38 times less return on investment than Ladangbaja Murni. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 10.92 times less risky than Ladangbaja Murni. It trades about 0.04 of its potential returns per unit of risk. Ladangbaja Murni PT is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  14,600  in Ladangbaja Murni PT on September 1, 2024 and sell it today you would earn a total of  16,400  from holding Ladangbaja Murni PT or generate 112.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.21%
Values	Daily Returns

Mitra Pinasthika Mustika  vs.  Ladangbaja Murni PT

Mitra Pinasthika Mustika

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitra Pinasthika Mustika has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Ladangbaja Murni

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ladangbaja Murni PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Mitra Pinasthika and Ladangbaja Murni

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

The idea behind Mitra Pinasthika Mustika and Ladangbaja Murni PT 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.