Correlation Between Indo Acidatama and PT Mulia
Can any of the company-specific risk be diversified away by investing in both Indo Acidatama and PT Mulia 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 Indo Acidatama and PT Mulia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Acidatama Tbk and PT Mulia Industrindo, you can compare the effects of market volatilities on Indo Acidatama and PT Mulia 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 Indo Acidatama with a short position of PT Mulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Acidatama and PT Mulia.
Diversification Opportunities for Indo Acidatama and PT Mulia
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indo and MLIA is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Indo Acidatama Tbk and PT Mulia Industrindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Mulia Industrindo and Indo Acidatama 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 Indo Acidatama Tbk are associated (or correlated) with PT Mulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Mulia Industrindo has no effect on the direction of Indo Acidatama i.e., Indo Acidatama and PT Mulia go up and down completely randomly.
Pair Corralation between Indo Acidatama and PT Mulia
Assuming the 90 days trading horizon Indo Acidatama Tbk is expected to generate 1.6 times more return on investment than PT Mulia. However, Indo Acidatama is 1.6 times more volatile than PT Mulia Industrindo. It trades about -0.03 of its potential returns per unit of risk. PT Mulia Industrindo is currently generating about -0.23 per unit of risk. If you would invest 5,200 in Indo Acidatama Tbk on September 7, 2024 and sell it today you would lose (200.00) from holding Indo Acidatama Tbk or give up 3.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Indo Acidatama Tbk vs. PT Mulia Industrindo
Performance |
Timeline |
Indo Acidatama Tbk |
PT Mulia Industrindo |
Indo Acidatama and PT Mulia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Indo Acidatama and PT Mulia
The main advantage of trading using opposite Indo Acidatama and PT Mulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Acidatama position performs unexpectedly, PT Mulia 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 PT Mulia will offset losses from the drop in PT Mulia's long position.Indo Acidatama vs. Jakarta Int Hotels | Indo Acidatama vs. Integra Indocabinet Tbk | Indo Acidatama vs. Indosterling Technomedia Tbk | Indo Acidatama vs. Indosat Tbk |
PT Mulia vs. Suparma Tbk | PT Mulia vs. Pelangi Indah Canindo | PT Mulia vs. Surya Toto Indonesia | PT Mulia vs. Lautan Luas Tbk |
Check out your portfolio center.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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