Correlation Between Protech Mitra and Mnc Kapital

Can any of the company-specific risk be diversified away by investing in both Protech Mitra and Mnc Kapital 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 Protech Mitra and Mnc Kapital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Protech Mitra Perkasa and Mnc Kapital Indonesia, you can compare the effects of market volatilities on Protech Mitra and Mnc Kapital 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 Protech Mitra with a short position of Mnc Kapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Protech Mitra and Mnc Kapital.

Diversification Opportunities for Protech Mitra and Mnc Kapital

-0.52

Correlation Coefficient

Protech Mitra  Mnc Kapital

Excellent diversification

The 3 months correlation between Protech and Mnc is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Protech Mitra Perkasa and Mnc Kapital Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Kapital Indonesia and Protech Mitra 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 Protech Mitra Perkasa are associated (or correlated) with Mnc Kapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Kapital Indonesia has no effect on the direction of Protech Mitra i.e., Protech Mitra and Mnc Kapital go up and down completely randomly.

Pair Corralation between Protech Mitra and Mnc Kapital

Assuming the 90 days trading horizon Protech Mitra Perkasa is expected to generate 0.69 times more return on investment than Mnc Kapital. However, Protech Mitra Perkasa is 1.44 times less risky than Mnc Kapital. It trades about -0.02 of its potential returns per unit of risk. Mnc Kapital Indonesia is currently generating about -0.06 per unit of risk. If you would invest  13,800  in Protech Mitra Perkasa on October 26, 2024 and sell it today you would lose (600.00) from holding Protech Mitra Perkasa or give up 4.35% of portfolio value over 90 days.

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

Protech Mitra Perkasa  vs.  Mnc Kapital Indonesia

Protech Mitra Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Protech Mitra Perkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Protech Mitra is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Mnc Kapital Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mnc Kapital Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 Protech Mitra and Mnc Kapital

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

The idea behind Protech Mitra Perkasa and Mnc Kapital Indonesia 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.