Correlation Between Ulima Nitra and Imago Mulia

Can any of the company-specific risk be diversified away by investing in both Ulima Nitra and Imago 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 Ulima Nitra and Imago Mulia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ulima Nitra PT and Imago Mulia Persada, you can compare the effects of market volatilities on Ulima Nitra and Imago 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 Ulima Nitra with a short position of Imago Mulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ulima Nitra and Imago Mulia.

Diversification Opportunities for Ulima Nitra and Imago Mulia

0.05

Correlation Coefficient

Ulima Nitra  Imago Mulia

Significant diversification

The 3 months correlation between Ulima and Imago is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ulima Nitra PT and Imago Mulia Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imago Mulia Persada and Ulima Nitra 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 Ulima Nitra PT are associated (or correlated) with Imago Mulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imago Mulia Persada has no effect on the direction of Ulima Nitra i.e., Ulima Nitra and Imago Mulia go up and down completely randomly.

Pair Corralation between Ulima Nitra and Imago Mulia

Assuming the 90 days trading horizon Ulima Nitra PT is expected to generate 1.21 times more return on investment than Imago Mulia. However, Ulima Nitra is 1.21 times more volatile than Imago Mulia Persada. It trades about 0.11 of its potential returns per unit of risk. Imago Mulia Persada is currently generating about 0.05 per unit of risk. If you would invest  5,935  in Ulima Nitra PT on October 10, 2024 and sell it today you would earn a total of  43,865  from holding Ulima Nitra PT or generate 739.09% return on investment over 90 days.

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

Ulima Nitra PT  vs.  Imago Mulia Persada

Ulima Nitra PT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ulima Nitra 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Imago Mulia Persada

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Imago Mulia Persada are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Imago Mulia disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ulima Nitra and Imago Mulia

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

The idea behind Ulima Nitra PT and Imago Mulia Persada 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.