Correlation Between Mitrabara Adiperdana and Centratama Telekomunikasi
Can any of the company-specific risk be diversified away by investing in both Mitrabara Adiperdana and Centratama Telekomunikasi 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 Mitrabara Adiperdana and Centratama Telekomunikasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitrabara Adiperdana PT and Centratama Telekomunikasi Ind, you can compare the effects of market volatilities on Mitrabara Adiperdana and Centratama Telekomunikasi 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 Mitrabara Adiperdana with a short position of Centratama Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabara Adiperdana and Centratama Telekomunikasi.
Diversification Opportunities for Mitrabara Adiperdana and Centratama Telekomunikasi
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mitrabara and Centratama is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabara Adiperdana PT and Centratama Telekomunikasi Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centratama Telekomunikasi and Mitrabara Adiperdana 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 Mitrabara Adiperdana PT are associated (or correlated) with Centratama Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centratama Telekomunikasi has no effect on the direction of Mitrabara Adiperdana i.e., Mitrabara Adiperdana and Centratama Telekomunikasi go up and down completely randomly.
Pair Corralation between Mitrabara Adiperdana and Centratama Telekomunikasi
Assuming the 90 days trading horizon Mitrabara Adiperdana is expected to generate 3.42 times less return on investment than Centratama Telekomunikasi. But when comparing it to its historical volatility, Mitrabara Adiperdana PT is 2.52 times less risky than Centratama Telekomunikasi. It trades about 0.19 of its potential returns per unit of risk. Centratama Telekomunikasi Ind is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,500 in Centratama Telekomunikasi Ind on February 3, 2024 and sell it today you would earn a total of 700.00 from holding Centratama Telekomunikasi Ind or generate 20.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Mitrabara Adiperdana PT vs. Centratama Telekomunikasi Ind
Performance |
Timeline |
Mitrabara Adiperdana |
Centratama Telekomunikasi |
Mitrabara Adiperdana and Centratama Telekomunikasi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mitrabara Adiperdana and Centratama Telekomunikasi
The main advantage of trading using opposite Mitrabara Adiperdana and Centratama Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitrabara Adiperdana position performs unexpectedly, Centratama Telekomunikasi 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 Centratama Telekomunikasi will offset losses from the drop in Centratama Telekomunikasi's long position.Mitrabara Adiperdana vs. Astra International Tbk | Mitrabara Adiperdana vs. Semen Indonesia Persero | Mitrabara Adiperdana vs. Indofood Sukses Makmur | Mitrabara Adiperdana vs. Unilever Indonesia Tbk |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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