Correlation Between Sumber Alfaria and Multifiling Mitra
Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Multifiling Mitra 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 Sumber Alfaria and Multifiling Mitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Alfaria Trijaya and Multifiling Mitra Indonesia, you can compare the effects of market volatilities on Sumber Alfaria and Multifiling Mitra 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 Sumber Alfaria with a short position of Multifiling Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Multifiling Mitra.
Diversification Opportunities for Sumber Alfaria and Multifiling Mitra
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sumber and Multifiling is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Multifiling Mitra Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multifiling Mitra and Sumber Alfaria 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 Sumber Alfaria Trijaya are associated (or correlated) with Multifiling Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multifiling Mitra has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Multifiling Mitra go up and down completely randomly.
Pair Corralation between Sumber Alfaria and Multifiling Mitra
Assuming the 90 days trading horizon Sumber Alfaria Trijaya is expected to under-perform the Multifiling Mitra. In addition to that, Sumber Alfaria is 1.02 times more volatile than Multifiling Mitra Indonesia. It trades about -0.32 of its total potential returns per unit of risk. Multifiling Mitra Indonesia is currently generating about 0.1 per unit of volatility. If you would invest 120,000 in Multifiling Mitra Indonesia on September 1, 2024 and sell it today you would earn a total of 5,000 from holding Multifiling Mitra Indonesia or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumber Alfaria Trijaya vs. Multifiling Mitra Indonesia
Performance |
| Timeline |
| Sumber Alfaria Trijaya |
| Multifiling Mitra |
Sumber Alfaria and Multifiling Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Alfaria and Multifiling Mitra
The main advantage of trading using opposite Sumber Alfaria and Multifiling Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Multifiling Mitra 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 Multifiling Mitra will offset losses from the drop in Multifiling Mitra's long position.| Sumber Alfaria vs. Bank BRISyariah Tbk | Sumber Alfaria vs. Mitra Pinasthika Mustika | Sumber Alfaria vs. Jakarta Int Hotels | Sumber Alfaria vs. Indosterling Technomedia Tbk |
| Multifiling Mitra vs. Matahari Department Store | Multifiling Mitra vs. Multi Medika Internasional | Multifiling Mitra vs. Visi Media Asia | Multifiling Mitra vs. Bayan Resources Tbk |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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