Correlation Between Mitrabara Adiperdana and Putra Rajawali
Can any of the company-specific risk be diversified away by investing in both Mitrabara Adiperdana and Putra Rajawali 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 Mitrabara Adiperdana and Putra Rajawali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitrabara Adiperdana PT and Putra Rajawali Kencana, you can compare the effects of market volatilities on Mitrabara Adiperdana and Putra Rajawali 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 Mitrabara Adiperdana with a short position of Putra Rajawali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabara Adiperdana and Putra Rajawali.
Diversification Opportunities for Mitrabara Adiperdana and Putra Rajawali
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mitrabara and Putra is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabara Adiperdana PT and Putra Rajawali Kencana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Rajawali Kencana and Mitrabara Adiperdana 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 Mitrabara Adiperdana PT are associated (or correlated) with Putra Rajawali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Rajawali Kencana has no effect on the direction of Mitrabara Adiperdana i.e., Mitrabara Adiperdana and Putra Rajawali go up and down completely randomly.
Pair Corralation between Mitrabara Adiperdana and Putra Rajawali
Assuming the 90 days trading horizon Mitrabara Adiperdana is expected to generate 4.2 times less return on investment than Putra Rajawali. But when comparing it to its historical volatility, Mitrabara Adiperdana PT is 2.52 times less risky than Putra Rajawali. It trades about 0.04 of its potential returns per unit of risk. Putra Rajawali Kencana is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 900.00 in Putra Rajawali Kencana on September 15, 2024 and sell it today you would earn a total of 300.00 from holding Putra Rajawali Kencana or generate 33.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Mitrabara Adiperdana PT vs. Putra Rajawali Kencana
Performance |
Timeline |
Mitrabara Adiperdana |
Putra Rajawali Kencana |
Mitrabara Adiperdana and Putra Rajawali Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mitrabara Adiperdana and Putra Rajawali
The main advantage of trading using opposite Mitrabara Adiperdana and Putra Rajawali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitrabara Adiperdana position performs unexpectedly, Putra Rajawali 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 Putra Rajawali will offset losses from the drop in Putra Rajawali's long position.Mitrabara Adiperdana vs. Baramulti Suksessarana Tbk | Mitrabara Adiperdana vs. Samindo Resources Tbk | Mitrabara Adiperdana vs. Hexindo Adiperkasa Tbk | Mitrabara Adiperdana vs. Mitra Pinasthika Mustika |
Putra Rajawali vs. PT Trimuda Nuansa | Putra Rajawali vs. Yelooo Integra Datanet | Putra Rajawali vs. Transcoal Pacific Tbk | Putra Rajawali vs. Weha Transportasi Indonesia |
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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