Correlation Between Mitra Pinasthika and Mandom Indonesia
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Mandom Indonesia 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 Mandom Indonesia 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 Mandom Indonesia Tbk, you can compare the effects of market volatilities on Mitra Pinasthika and Mandom Indonesia 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 Mandom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Mandom Indonesia.
Diversification Opportunities for Mitra Pinasthika and Mandom Indonesia
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitra and Mandom is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Mandom Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mandom Indonesia 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 Mandom Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mandom Indonesia Tbk has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Mandom Indonesia go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Mandom Indonesia
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to generate 0.35 times more return on investment than Mandom Indonesia. However, Mitra Pinasthika Mustika is 2.89 times less risky than Mandom Indonesia. It trades about 0.01 of its potential returns per unit of risk. Mandom Indonesia Tbk is currently generating about -0.14 per unit of risk. If you would invest 98,500 in Mitra Pinasthika Mustika on December 30, 2024 and sell it today you would earn a total of 500.00 from holding Mitra Pinasthika Mustika or generate 0.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Mitra Pinasthika Mustika vs. Mandom Indonesia Tbk
Performance |
Timeline |
Mitra Pinasthika Mustika |
Mandom Indonesia Tbk |
Mitra Pinasthika and Mandom Indonesia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mitra Pinasthika and Mandom Indonesia
The main advantage of trading using opposite Mitra Pinasthika and Mandom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Mandom Indonesia 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 Mandom Indonesia will offset losses from the drop in Mandom Indonesia's long position.Mitra Pinasthika vs. Saratoga Investama Sedaya | Mitra Pinasthika vs. Puradelta Lestari PT | Mitra Pinasthika vs. Cikarang Listrindo Tbk | Mitra Pinasthika vs. Erajaya Swasembada Tbk |
Mandom Indonesia vs. Mustika Ratu Tbk | Mandom Indonesia vs. Siantar Top Tbk | Mandom Indonesia vs. Tempo Scan Pacific | Mandom Indonesia vs. Merck Tbk |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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