Correlation Between Tembaga Mulia and PT Mulia

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

By analyzing existing cross correlation between Tembaga Mulia Semanan and PT Mulia Industrindo, you can compare the effects of market volatilities on Tembaga Mulia and PT Mulia 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 Tembaga Mulia with a short position of PT Mulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tembaga Mulia and PT Mulia.

Diversification Opportunities for Tembaga Mulia and PT Mulia

-0.5

Correlation Coefficient

Tembaga Mulia  PT Mulia

Very good diversification

The 3 months correlation between Tembaga and MLIA is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Tembaga Mulia Semanan and PT Mulia Industrindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Mulia Industrindo and Tembaga Mulia 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 Tembaga Mulia Semanan are associated (or correlated) with PT Mulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Mulia Industrindo has no effect on the direction of Tembaga Mulia i.e., Tembaga Mulia and PT Mulia go up and down completely randomly.

Pair Corralation between Tembaga Mulia and PT Mulia

Assuming the 90 days trading horizon Tembaga Mulia Semanan is expected to generate 2.18 times more return on investment than PT Mulia. However, Tembaga Mulia is 2.18 times more volatile than PT Mulia Industrindo. It trades about 0.02 of its potential returns per unit of risk. PT Mulia Industrindo is currently generating about -0.19 per unit of risk. If you would invest  90,000  in Tembaga Mulia Semanan on September 15, 2024 and sell it today you would earn a total of  1,500  from holding Tembaga Mulia Semanan or generate 1.67% return on investment over 90 days.

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

Tembaga Mulia Semanan  vs.  PT Mulia Industrindo

Tembaga Mulia Semanan

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tembaga Mulia Semanan are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Tembaga Mulia is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PT Mulia Industrindo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Mulia Industrindo 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 Tembaga Mulia and PT Mulia

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

The idea behind Tembaga Mulia Semanan and PT Mulia Industrindo 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.