Correlation Between Rig Tenders and Mitrabahtera Segara

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

By analyzing existing cross correlation between Rig Tenders Tbk and Mitrabahtera Segara Sejati, you can compare the effects of market volatilities on Rig Tenders and Mitrabahtera Segara 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 Rig Tenders with a short position of Mitrabahtera Segara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rig Tenders and Mitrabahtera Segara.

Diversification Opportunities for Rig Tenders and Mitrabahtera Segara

-0.52

Correlation Coefficient

Rig Tenders  Mitrabahtera Segara

Excellent diversification

The 3 months correlation between Rig and Mitrabahtera is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Rig Tenders Tbk and Mitrabahtera Segara Sejati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabahtera Segara and Rig Tenders 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 Rig Tenders Tbk are associated (or correlated) with Mitrabahtera Segara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitrabahtera Segara has no effect on the direction of Rig Tenders i.e., Rig Tenders and Mitrabahtera Segara go up and down completely randomly.

Pair Corralation between Rig Tenders and Mitrabahtera Segara

Assuming the 90 days trading horizon Rig Tenders Tbk is expected to under-perform the Mitrabahtera Segara. But the stock apears to be less risky and, when comparing its historical volatility, Rig Tenders Tbk is 1.54 times less risky than Mitrabahtera Segara. The stock trades about -0.14 of its potential returns per unit of risk. The Mitrabahtera Segara Sejati is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  101,500  in Mitrabahtera Segara Sejati on March 4, 2024 and sell it today you would earn a total of  12,000  from holding Mitrabahtera Segara Sejati or generate 11.82% return on investment over 90 days.

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

Rig Tenders Tbk  vs.  Mitrabahtera Segara Sejati

Rig Tenders Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rig Tenders Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in July 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Mitrabahtera Segara

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mitrabahtera Segara Sejati are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Mitrabahtera Segara disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rig Tenders and Mitrabahtera Segara

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

The idea behind Rig Tenders Tbk and Mitrabahtera Segara Sejati 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.