Correlation Between Mitra Pinasthika and Total Bangun

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

Diversification Opportunities for Mitra Pinasthika and Total Bangun

0.63

Correlation Coefficient

Mitra Pinasthika  Total Bangun

Poor diversification

The 3 months correlation between Mitra and Total is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Total Bangun Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Bangun Persada 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 Total Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Bangun Persada has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Total Bangun go up and down completely randomly.

Pair Corralation between Mitra Pinasthika and Total Bangun

Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 6.92 times less return on investment than Total Bangun. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 2.77 times less risky than Total Bangun. It trades about 0.04 of its potential returns per unit of risk. Total Bangun Persada is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  33,652  in Total Bangun Persada on October 27, 2024 and sell it today you would earn a total of  28,348  from holding Total Bangun Persada or generate 84.24% 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.  Total Bangun Persada

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.

Total Bangun Persada

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Total Bangun Persada 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Mitra Pinasthika and Total Bangun

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

The idea behind Mitra Pinasthika Mustika and Total Bangun Persada 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.