Correlation Between Maha Properti and Pollux Investasi

Can any of the company-specific risk be diversified away by investing in both Maha Properti and Pollux Investasi 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 Maha Properti and Pollux Investasi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maha Properti Indonesia and Pollux Investasi Internasional, you can compare the effects of market volatilities on Maha Properti and Pollux Investasi 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 Maha Properti with a short position of Pollux Investasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maha Properti and Pollux Investasi.

Diversification Opportunities for Maha Properti and Pollux Investasi

-0.59

Correlation Coefficient

Maha Properti  Pollux Investasi

Excellent diversification

The 3 months correlation between Maha and Pollux is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Maha Properti Indonesia and Pollux Investasi Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pollux Investasi Int and Maha Properti 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 Maha Properti Indonesia are associated (or correlated) with Pollux Investasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pollux Investasi Int has no effect on the direction of Maha Properti i.e., Maha Properti and Pollux Investasi go up and down completely randomly.

Pair Corralation between Maha Properti and Pollux Investasi

Assuming the 90 days trading horizon Maha Properti Indonesia is expected to generate 0.51 times more return on investment than Pollux Investasi. However, Maha Properti Indonesia is 1.95 times less risky than Pollux Investasi. It trades about 0.14 of its potential returns per unit of risk. Pollux Investasi Internasional is currently generating about -0.08 per unit of risk. If you would invest  185,000  in Maha Properti Indonesia on October 1, 2024 and sell it today you would earn a total of  17,000  from holding Maha Properti Indonesia or generate 9.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Maha Properti Indonesia  vs.  Pollux Investasi Internasional

Maha Properti Indonesia

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maha Properti Indonesia are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Maha Properti may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pollux Investasi Int

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pollux Investasi Internasional has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Maha Properti and Pollux Investasi

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

The idea behind Maha Properti Indonesia and Pollux Investasi Internasional 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.