Correlation Between TBS Energi and Mitrabara Adiperdana

Can any of the company-specific risk be diversified away by investing in both TBS Energi and Mitrabara Adiperdana 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 TBS Energi and Mitrabara Adiperdana into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TBS Energi Utama and Mitrabara Adiperdana PT, you can compare the effects of market volatilities on TBS Energi and Mitrabara Adiperdana 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 TBS Energi with a short position of Mitrabara Adiperdana. Check out your portfolio center. Please also check ongoing floating volatility patterns of TBS Energi and Mitrabara Adiperdana.

Diversification Opportunities for TBS Energi and Mitrabara Adiperdana

0.21

Correlation Coefficient

TBS Energi  Mitrabara Adiperdana

Modest diversification

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

Pair Corralation between TBS Energi and Mitrabara Adiperdana

Assuming the 90 days trading horizon TBS Energi Utama is expected to generate 1.7 times more return on investment than Mitrabara Adiperdana. However, TBS Energi is 1.7 times more volatile than Mitrabara Adiperdana PT. It trades about 0.0 of its potential returns per unit of risk. Mitrabara Adiperdana PT is currently generating about -0.06 per unit of risk. If you would invest  63,000  in TBS Energi Utama on September 1, 2024 and sell it today you would lose (18,400) from holding TBS Energi Utama or give up 29.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

TBS Energi Utama  vs.  Mitrabara Adiperdana PT

TBS Energi Utama

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mitrabara Adiperdana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitrabara Adiperdana PT 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 December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with TBS Energi and Mitrabara Adiperdana

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

The idea behind TBS Energi Utama and Mitrabara Adiperdana PT 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.