Correlation Between MD Pictures and Indosat Tbk
Can any of the company-specific risk be diversified away by investing in both MD Pictures and Indosat Tbk 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 MD Pictures and Indosat Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MD Pictures Tbk and Indosat Tbk, you can compare the effects of market volatilities on MD Pictures and Indosat Tbk 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 MD Pictures with a short position of Indosat Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of MD Pictures and Indosat Tbk.
Diversification Opportunities for MD Pictures and Indosat Tbk
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FILM and Indosat is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding MD Pictures Tbk and Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosat Tbk and MD Pictures 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 MD Pictures Tbk are associated (or correlated) with Indosat Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosat Tbk has no effect on the direction of MD Pictures i.e., MD Pictures and Indosat Tbk go up and down completely randomly.
Pair Corralation between MD Pictures and Indosat Tbk
Assuming the 90 days trading horizon MD Pictures is expected to generate 1.1 times less return on investment than Indosat Tbk. In addition to that, MD Pictures is 1.3 times more volatile than Indosat Tbk. It trades about 0.15 of its total potential returns per unit of risk. Indosat Tbk is currently generating about 0.21 per unit of volatility. If you would invest 220,000 in Indosat Tbk on September 13, 2024 and sell it today you would earn a total of 29,000 from holding Indosat Tbk or generate 13.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MD Pictures Tbk vs. Indosat Tbk
Performance |
Timeline |
MD Pictures Tbk |
Indosat Tbk |
MD Pictures and Indosat Tbk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MD Pictures and Indosat Tbk
The main advantage of trading using opposite MD Pictures and Indosat Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MD Pictures position performs unexpectedly, Indosat Tbk 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 Indosat Tbk will offset losses from the drop in Indosat Tbk's long position.MD Pictures vs. MNC Studios International | MD Pictures vs. Elang Mahkota Teknologi | MD Pictures vs. Medikaloka Hermina PT | MD Pictures vs. Surya Esa Perkasa |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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