Correlation Between Protech Mitra and Fortune Mate

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

Diversification Opportunities for Protech Mitra and Fortune Mate

0.21

Correlation Coefficient

Protech Mitra  Fortune Mate

Modest diversification

The 3 months correlation between Protech and Fortune is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Protech Mitra Perkasa and Fortune Mate Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Mate 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 Fortune Mate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Mate Indonesia has no effect on the direction of Protech Mitra i.e., Protech Mitra and Fortune Mate go up and down completely randomly.

Pair Corralation between Protech Mitra and Fortune Mate

Assuming the 90 days trading horizon Protech Mitra is expected to generate 9.26 times less return on investment than Fortune Mate. But when comparing it to its historical volatility, Protech Mitra Perkasa is 3.0 times less risky than Fortune Mate. It trades about 0.08 of its potential returns per unit of risk. Fortune Mate Indonesia is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  24,800  in Fortune Mate Indonesia on October 10, 2024 and sell it today you would earn a total of  29,700  from holding Fortune Mate Indonesia or generate 119.76% return on investment over 90 days.

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

Protech Mitra Perkasa  vs.  Fortune Mate Indonesia

Protech Mitra Perkasa

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Protech Mitra Perkasa are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Protech Mitra may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fortune Mate Indonesia

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fortune Mate Indonesia are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Fortune Mate disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Protech Mitra and Fortune Mate

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

The idea behind Protech Mitra Perkasa and Fortune Mate 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.