Correlation Between Prasidha Aneka and Mustika Ratu

Can any of the company-specific risk be diversified away by investing in both Prasidha Aneka and Mustika Ratu 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 Prasidha Aneka and Mustika Ratu into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prasidha Aneka Niaga and Mustika Ratu Tbk, you can compare the effects of market volatilities on Prasidha Aneka and Mustika Ratu 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 Prasidha Aneka with a short position of Mustika Ratu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prasidha Aneka and Mustika Ratu.

Diversification Opportunities for Prasidha Aneka and Mustika Ratu

-0.06

Correlation Coefficient

Prasidha Aneka  Mustika Ratu

Good diversification

The 3 months correlation between Prasidha and Mustika is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Prasidha Aneka Niaga and Mustika Ratu Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustika Ratu Tbk and Prasidha Aneka 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 Prasidha Aneka Niaga are associated (or correlated) with Mustika Ratu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustika Ratu Tbk has no effect on the direction of Prasidha Aneka i.e., Prasidha Aneka and Mustika Ratu go up and down completely randomly.

Pair Corralation between Prasidha Aneka and Mustika Ratu

Assuming the 90 days trading horizon Prasidha Aneka Niaga is expected to generate 2.37 times more return on investment than Mustika Ratu. However, Prasidha Aneka is 2.37 times more volatile than Mustika Ratu Tbk. It trades about 0.03 of its potential returns per unit of risk. Mustika Ratu Tbk is currently generating about -0.2 per unit of risk. If you would invest  8,100  in Prasidha Aneka Niaga on December 1, 2024 and sell it today you would earn a total of  100.00  from holding Prasidha Aneka Niaga or generate 1.23% return on investment over 90 days.

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

Prasidha Aneka Niaga  vs.  Mustika Ratu Tbk

Prasidha Aneka Niaga

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Prasidha Aneka Niaga are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Prasidha Aneka may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mustika Ratu Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mustika Ratu Tbk 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Prasidha Aneka and Mustika Ratu

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

The idea behind Prasidha Aneka Niaga and Mustika Ratu 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 Commodity Directory module to find actively traded commodities issued by global exchanges.