Correlation Between Mitra Pinasthika and Trimegah Securities

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

Diversification Opportunities for Mitra Pinasthika and Trimegah Securities

0.65

Correlation Coefficient

Mitra Pinasthika  Trimegah Securities

Poor diversification

The 3 months correlation between Mitra and Trimegah is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Trimegah Securities Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Securities 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 Trimegah Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Securities Tbk has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Trimegah Securities go up and down completely randomly.

Pair Corralation between Mitra Pinasthika and Trimegah Securities

Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 6.65 times less return on investment than Trimegah Securities. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 3.03 times less risky than Trimegah Securities. It trades about 0.01 of its potential returns per unit of risk. Trimegah Securities Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  37,000  in Trimegah Securities Tbk on December 30, 2024 and sell it today you would earn a total of  1,000.00  from holding Trimegah Securities Tbk or generate 2.7% 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.  Trimegah Securities 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.

Trimegah Securities Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trimegah Securities Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Trimegah Securities is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Mitra Pinasthika and Trimegah Securities

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

The idea behind Mitra Pinasthika Mustika and Trimegah Securities 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.