Correlation Between Perusahaan Perseroan and STOMO MITSUI

Can any of the company-specific risk be diversified away by investing in both Perusahaan Perseroan and STOMO MITSUI 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 Perusahaan Perseroan and STOMO MITSUI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Perusahaan Perseroan PT and STOMO MITSUI FINL, you can compare the effects of market volatilities on Perusahaan Perseroan and STOMO MITSUI 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 Perusahaan Perseroan with a short position of STOMO MITSUI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Perseroan and STOMO MITSUI.

Diversification Opportunities for Perusahaan Perseroan and STOMO MITSUI

-0.48

Correlation Coefficient

Perusahaan Perseroan  STOMO MITSUI

Very good diversification

The 3 months correlation between Perusahaan and STOMO is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Perseroan PT and STOMO MITSUI FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STOMO MITSUI FINL and Perusahaan Perseroan 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 Perusahaan Perseroan PT are associated (or correlated) with STOMO MITSUI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STOMO MITSUI FINL has no effect on the direction of Perusahaan Perseroan i.e., Perusahaan Perseroan and STOMO MITSUI go up and down completely randomly.

Pair Corralation between Perusahaan Perseroan and STOMO MITSUI

Assuming the 90 days horizon Perusahaan Perseroan is expected to generate 2.23 times less return on investment than STOMO MITSUI. In addition to that, Perusahaan Perseroan is 1.47 times more volatile than STOMO MITSUI FINL. It trades about 0.03 of its total potential returns per unit of risk. STOMO MITSUI FINL is currently generating about 0.09 per unit of volatility. If you would invest  2,317  in STOMO MITSUI FINL on October 15, 2024 and sell it today you would earn a total of  50.00  from holding STOMO MITSUI FINL or generate 2.16% return on investment over 90 days.

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

Perusahaan Perseroan PT  vs.  STOMO MITSUI FINL

Perusahaan Perseroan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Perusahaan Perseroan is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

STOMO MITSUI FINL

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STOMO MITSUI FINL are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, STOMO MITSUI unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perusahaan Perseroan and STOMO MITSUI

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

The idea behind Perusahaan Perseroan PT and STOMO MITSUI FINL 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .