Paper: arXiv 2303.07244

Authors: Muhammad Aufaristama

Abstract

This study aimed to examine the correlation between the stock prices of two major Indonesian holding companies, MNC Group and Elang Mahkota Teknologi (Emtek) Group, and their respective subsidiaries as case studies. The data for the analysis were collected from 2013 to 2022, and Spearman correlation was used to determine the strength and direction of the relationship between the stock prices of the holding companies and their subsidiaries. The results of the analysis revealed that there were varying degrees of correlation between the stock prices of the holding companies and their subsidiaries. The strongest positive correlation was observed between BHIT and BMTR, while the weakest correlations were found between BHIT and IPTV, and BHIT and MSIN. The correlations were also found to have changed over time, possibly due to market conditions, company-specific events, or changes in industry sectors.In the case of Emtek Group, the analysis suggested that EMTK’s stock price movements had a significant impact on the stock prices of its subsidiaries, with varying strengths of relationships. The negative correlation between EMTK and SCMA over the entire period suggested an inverse relationship, while positive correlations with BUKA, AMOR, BBHI, and RSGK indicated a tendency to move in the same direction as EMTK’s stock price. The correlations were found to have increased over time, possibly due to market conditions and EMTK’s ownership stake in these companies. Overall, the findings of this study suggest that there is a complex interplay between the stock prices of parent companies and their subsidiaries, and that there are a variety of factors that can influence these relationships over time. These findings may be useful for investors in making informed decisions about their investment portfolios, as changes in the correlations could impact their portfolio’s performance.

Complexity vs Empirical Score

  • Math Complexity: 2.0/10
  • Empirical Rigor: 3.5/10
  • Quadrant: Philosophers — conceptual discussion, limited math and data

Why this score: The paper relies almost entirely on basic Spearman rank correlations without advanced econometric modeling, statistical controls, or actionable trading/investment strategies. While the case study on Indonesian holding companies offers a localized empirical view, the analytical depth and methodological novelty are quite limited.

Research Flowchart

  flowchart TD
    A[Goal: Examine Stock Price Relationship<br/>Holding Companies vs. Subsidiaries in Indonesia] --> B[Data Collection: 2013-2022 Stock Prices<br/>MNC Group & Emtek Group]
    B --> C[Methodology: Spearman Correlation Analysis<br/>Time-Series & Co-movement]
    C --> D[Case Study 1: MNC Group BHIT]
    C --> E[Case Study 2: Emtek Group EMTK]
    
    D --> F[MNC Findings:<br/>Strongest (+) with BMTR<br/>Weakest with IPTV & MSIN]
    E --> G[Emtek Findings:<br/>Inverse (-) with SCMA<br/>(+) with BUKA, AMOR, BBHI, RSGK]
    
    F --> H[Overall Outcome: Dynamic, complex relationships<br/>varying over time due to market conditions<br/>& ownership stakes]
    G --> H