Correlation Between Megapower Makmur and Asuransi Jiwa

Can any of the company-specific risk be diversified away by investing in both Megapower Makmur and Asuransi Jiwa 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 Megapower Makmur and Asuransi Jiwa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Megapower Makmur TBK and Asuransi Jiwa Syariah, you can compare the effects of market volatilities on Megapower Makmur and Asuransi Jiwa 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 Megapower Makmur with a short position of Asuransi Jiwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megapower Makmur and Asuransi Jiwa.

Diversification Opportunities for Megapower Makmur and Asuransi Jiwa

-0.46

Correlation Coefficient

Megapower Makmur  Asuransi Jiwa

Very good diversification

The 3 months correlation between Megapower and Asuransi is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Megapower Makmur TBK and Asuransi Jiwa Syariah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Jiwa Syariah and Megapower Makmur 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 Megapower Makmur TBK are associated (or correlated) with Asuransi Jiwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Jiwa Syariah has no effect on the direction of Megapower Makmur i.e., Megapower Makmur and Asuransi Jiwa go up and down completely randomly.

Pair Corralation between Megapower Makmur and Asuransi Jiwa

Assuming the 90 days trading horizon Megapower Makmur TBK is expected to under-perform the Asuransi Jiwa. In addition to that, Megapower Makmur is 1.73 times more volatile than Asuransi Jiwa Syariah. It trades about -0.1 of its total potential returns per unit of risk. Asuransi Jiwa Syariah is currently generating about -0.08 per unit of volatility. If you would invest  15,400  in Asuransi Jiwa Syariah on October 10, 2024 and sell it today you would lose (500.00) from holding Asuransi Jiwa Syariah or give up 3.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Megapower Makmur TBK  vs.  Asuransi Jiwa Syariah

Megapower Makmur TBK

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Megapower Makmur TBK are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Megapower Makmur disclosed solid returns over the last few months and may actually be approaching a breakup point.

Asuransi Jiwa Syariah

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asuransi Jiwa Syariah are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Asuransi Jiwa disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Megapower Makmur and Asuransi Jiwa

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

The idea behind Megapower Makmur TBK and Asuransi Jiwa Syariah 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.