Correlation Between Mahaka Radio and Global Mediacom

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

By analyzing existing cross correlation between Mahaka Radio Integra and Global Mediacom Tbk, you can compare the effects of market volatilities on Mahaka Radio and Global Mediacom 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 Mahaka Radio with a short position of Global Mediacom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahaka Radio and Global Mediacom.

Diversification Opportunities for Mahaka Radio and Global Mediacom

-0.04

Correlation Coefficient

Mahaka Radio  Global Mediacom

Good diversification

The 3 months correlation between Mahaka and Global is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mahaka Radio Integra and Global Mediacom Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Mediacom Tbk and Mahaka Radio 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 Mahaka Radio Integra are associated (or correlated) with Global Mediacom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Mediacom Tbk has no effect on the direction of Mahaka Radio i.e., Mahaka Radio and Global Mediacom go up and down completely randomly.

Pair Corralation between Mahaka Radio and Global Mediacom

If you would invest  5,000  in Mahaka Radio Integra on March 19, 2024 and sell it today you would earn a total of  0.00  from holding Mahaka Radio Integra or generate 0.0% return on investment over 90 days.

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

Mahaka Radio Integra  vs.  Global Mediacom Tbk

Mahaka Radio Integra

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mahaka Radio Integra has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Global Mediacom Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Mediacom Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators 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 Mahaka Radio and Global Mediacom

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

The idea behind Mahaka Radio Integra and Global Mediacom Tbk 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.