Correlation Between Trias Sentosa and PT Mulia
Can any of the company-specific risk be diversified away by investing in both Trias Sentosa 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 Trias Sentosa and PT Mulia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trias Sentosa Tbk and PT Mulia Industrindo, you can compare the effects of market volatilities on Trias Sentosa 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 Trias Sentosa with a short position of PT Mulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trias Sentosa and PT Mulia.
Diversification Opportunities for Trias Sentosa and PT Mulia
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Trias and MLIA is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa i.e., Trias Sentosa and PT Mulia go up and down completely randomly.
Pair Corralation between Trias Sentosa and PT Mulia
Assuming the 90 days trading horizon Trias Sentosa Tbk is expected to generate 1.57 times more return on investment than PT Mulia. However, Trias Sentosa is 1.57 times more volatile than PT Mulia Industrindo. It trades about 0.02 of its potential returns per unit of risk. PT Mulia Industrindo is currently generating about -0.18 per unit of risk. If you would invest 49,200 in Trias Sentosa Tbk on September 11, 2024 and sell it today you would earn a total of 800.00 from holding Trias Sentosa Tbk or generate 1.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Trias Sentosa Tbk vs. PT Mulia Industrindo
Performance |
Timeline |
Trias Sentosa Tbk |
PT Mulia Industrindo |
Trias Sentosa and PT Mulia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Trias Sentosa and PT Mulia
The main advantage of trading using opposite Trias Sentosa and PT Mulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trias Sentosa 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.Trias Sentosa vs. Suparma Tbk | Trias Sentosa vs. Champion Pacific Indonesia | Trias Sentosa vs. Indo Acidatama Tbk | Trias Sentosa vs. Unggul Indah Cahaya |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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