Correlation Between Mitra Keluarga and Map Boga

Can any of the company-specific risk be diversified away by investing in both Mitra Keluarga and Map Boga 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 Mitra Keluarga and Map Boga into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mitra Keluarga Karyasehat and Map Boga Adiperkasa, you can compare the effects of market volatilities on Mitra Keluarga and Map Boga 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 Mitra Keluarga with a short position of Map Boga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Keluarga and Map Boga.

Diversification Opportunities for Mitra Keluarga and Map Boga

0.92

Correlation Coefficient

Mitra Keluarga  Map Boga

Almost no diversification

The 3 months correlation between Mitra and Map is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Keluarga Karyasehat and Map Boga Adiperkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Map Boga Adiperkasa and Mitra Keluarga 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 Mitra Keluarga Karyasehat are associated (or correlated) with Map Boga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Map Boga Adiperkasa has no effect on the direction of Mitra Keluarga i.e., Mitra Keluarga and Map Boga go up and down completely randomly.

Pair Corralation between Mitra Keluarga and Map Boga

Assuming the 90 days trading horizon Mitra Keluarga Karyasehat is expected to under-perform the Map Boga. In addition to that, Mitra Keluarga is 2.14 times more volatile than Map Boga Adiperkasa. It trades about -0.3 of its total potential returns per unit of risk. Map Boga Adiperkasa is currently generating about -0.22 per unit of volatility. If you would invest  143,000  in Map Boga Adiperkasa on September 18, 2024 and sell it today you would lose (5,000) from holding Map Boga Adiperkasa or give up 3.5% of portfolio value over 90 days.

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

Mitra Keluarga Karyasehat  vs.  Map Boga Adiperkasa

Mitra Keluarga Karyasehat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitra Keluarga Karyasehat 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Map Boga Adiperkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Map Boga Adiperkasa 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Mitra Keluarga and Map Boga

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

The idea behind Mitra Keluarga Karyasehat and Map Boga Adiperkasa 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.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.