Correlation Between Mitrabahtera Segara and Pelayaran Nelly

Can any of the company-specific risk be diversified away by investing in both Mitrabahtera Segara and Pelayaran Nelly 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 Mitrabahtera Segara and Pelayaran Nelly into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mitrabahtera Segara Sejati and Pelayaran Nelly Dwi, you can compare the effects of market volatilities on Mitrabahtera Segara and Pelayaran Nelly 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 Mitrabahtera Segara with a short position of Pelayaran Nelly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabahtera Segara and Pelayaran Nelly.

Diversification Opportunities for Mitrabahtera Segara and Pelayaran Nelly

-0.46

Correlation Coefficient

Mitrabahtera Segara  Pelayaran Nelly

Very good diversification

The 3 months correlation between Mitrabahtera and Pelayaran is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabahtera Segara Sejati and Pelayaran Nelly Dwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pelayaran Nelly Dwi and Mitrabahtera Segara 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 Mitrabahtera Segara Sejati are associated (or correlated) with Pelayaran Nelly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pelayaran Nelly Dwi has no effect on the direction of Mitrabahtera Segara i.e., Mitrabahtera Segara and Pelayaran Nelly go up and down completely randomly.

Pair Corralation between Mitrabahtera Segara and Pelayaran Nelly

Assuming the 90 days trading horizon Mitrabahtera Segara Sejati is expected to generate 3.1 times more return on investment than Pelayaran Nelly. However, Mitrabahtera Segara is 3.1 times more volatile than Pelayaran Nelly Dwi. It trades about 0.0 of its potential returns per unit of risk. Pelayaran Nelly Dwi is currently generating about -0.05 per unit of risk. If you would invest  103,000  in Mitrabahtera Segara Sejati on September 1, 2024 and sell it today you would lose (1,500) from holding Mitrabahtera Segara Sejati or give up 1.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Mitrabahtera Segara Sejati  vs.  Pelayaran Nelly Dwi

Mitrabahtera Segara

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pelayaran Nelly Dwi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mitrabahtera Segara and Pelayaran Nelly

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

The idea behind Mitrabahtera Segara Sejati and Pelayaran Nelly Dwi 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.