Correlation Between PT Mitra and Kohls Corp

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

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

Diversification Opportunities for PT Mitra and Kohls Corp

0.74

Correlation Coefficient

PT Mitra  Kohls Corp

Poor diversification

The 3 months correlation between PMDKF and Kohls is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PT Mitra Adiperkasa and Kohls Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kohls Corp and PT Mitra 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 PT Mitra Adiperkasa are associated (or correlated) with Kohls Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kohls Corp has no effect on the direction of PT Mitra i.e., PT Mitra and Kohls Corp go up and down completely randomly.

Pair Corralation between PT Mitra and Kohls Corp

If you would invest  2,186  in Kohls Corp on February 17, 2024 and sell it today you would earn a total of  388.00  from holding Kohls Corp or generate 17.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

PT Mitra Adiperkasa  vs.  Kohls Corp

PT Mitra Adiperkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Mitra Adiperkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Kohls Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kohls Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Kohls Corp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PT Mitra and Kohls Corp

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

The idea behind PT Mitra Adiperkasa and Kohls Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.