Correlation Between Mitra Pinasthika and Mandala Multifinance

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

Diversification Opportunities for Mitra Pinasthika and Mandala Multifinance

-0.14

Correlation Coefficient

Mitra Pinasthika  Mandala Multifinance

Good diversification

The 3 months correlation between Mitra and Mandala is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Mandala Multifinance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mandala Multifinance Tbk 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 Mandala Multifinance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mandala Multifinance Tbk has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Mandala Multifinance go up and down completely randomly.

Pair Corralation between Mitra Pinasthika and Mandala Multifinance

Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 15.19 times less return on investment than Mandala Multifinance. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 5.06 times less risky than Mandala Multifinance. It trades about 0.01 of its potential returns per unit of risk. Mandala Multifinance Tbk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  335,000  in Mandala Multifinance Tbk on December 30, 2024 and sell it today you would earn a total of  15,000  from holding Mandala Multifinance Tbk or generate 4.48% return on investment over 90 days.

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

Mitra Pinasthika Mustika  vs.  Mandala Multifinance Tbk

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.

Mandala Multifinance Tbk

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Mitra Pinasthika and Mandala Multifinance

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

The idea behind Mitra Pinasthika Mustika and Mandala Multifinance Tbk 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.