Correlation Between Trimegah Securities and Mitra Pinasthika

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

By analyzing existing cross correlation between Trimegah Securities Tbk and Mitra Pinasthika Mustika, you can compare the effects of market volatilities on Trimegah Securities and Mitra Pinasthika 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 Trimegah Securities with a short position of Mitra Pinasthika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimegah Securities and Mitra Pinasthika.

Diversification Opportunities for Trimegah Securities and Mitra Pinasthika

-0.84

Correlation Coefficient

Trimegah Securities  Mitra Pinasthika

Pay attention - limited upside

The 3 months correlation between Trimegah and Mitra is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Trimegah Securities Tbk and Mitra Pinasthika Mustika in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitra Pinasthika Mustika and Trimegah Securities 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 Trimegah Securities Tbk are associated (or correlated) with Mitra Pinasthika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitra Pinasthika Mustika has no effect on the direction of Trimegah Securities i.e., Trimegah Securities and Mitra Pinasthika go up and down completely randomly.

Pair Corralation between Trimegah Securities and Mitra Pinasthika

Assuming the 90 days trading horizon Trimegah Securities Tbk is expected to generate 4.48 times more return on investment than Mitra Pinasthika. However, Trimegah Securities is 4.48 times more volatile than Mitra Pinasthika Mustika. It trades about 0.22 of its potential returns per unit of risk. Mitra Pinasthika Mustika is currently generating about -0.1 per unit of risk. If you would invest  26,400  in Trimegah Securities Tbk on September 4, 2024 and sell it today you would earn a total of  9,400  from holding Trimegah Securities Tbk or generate 35.61% return on investment over 90 days.

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

Trimegah Securities Tbk  vs.  Mitra Pinasthika Mustika

Trimegah Securities Tbk

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Trimegah Securities Tbk are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Trimegah Securities disclosed solid returns over the last few months and may actually be approaching a breakup point.

Mitra Pinasthika Mustika

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitra Pinasthika Mustika has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Mitra Pinasthika 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 Trimegah Securities and Mitra Pinasthika

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

The idea behind Trimegah Securities Tbk and Mitra Pinasthika Mustika 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.