Correlation Between Sumber Alfaria and Multi Indocitra
Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Multi Indocitra 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 Multi Indocitra 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 Multi Indocitra Tbk, you can compare the effects of market volatilities on Sumber Alfaria and Multi Indocitra 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 Multi Indocitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Multi Indocitra.
Diversification Opportunities for Sumber Alfaria and Multi Indocitra
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumber and Multi is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Multi Indocitra Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Indocitra Tbk 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 Multi Indocitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Indocitra Tbk has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Multi Indocitra go up and down completely randomly.
Pair Corralation between Sumber Alfaria and Multi Indocitra
Assuming the 90 days trading horizon Sumber Alfaria is expected to generate 1.13 times less return on investment than Multi Indocitra. But when comparing it to its historical volatility, Sumber Alfaria Trijaya is 1.37 times less risky than Multi Indocitra. It trades about 0.02 of its potential returns per unit of risk. Multi Indocitra Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 48,340 in Multi Indocitra Tbk on September 3, 2024 and sell it today you would earn a total of 3,660 from holding Multi Indocitra Tbk or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sumber Alfaria Trijaya vs. Multi Indocitra Tbk
Performance |
| Timeline |
| Sumber Alfaria Trijaya |
| Multi Indocitra Tbk |
Sumber Alfaria and Multi Indocitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Alfaria and Multi Indocitra
The main advantage of trading using opposite Sumber Alfaria and Multi Indocitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Multi Indocitra 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 Multi Indocitra will offset losses from the drop in Multi Indocitra's long position.| Sumber Alfaria vs. Elang Mahkota Teknologi | Sumber Alfaria vs. Ace Hardware Indonesia | Sumber Alfaria vs. BFI Finance Indonesia | Sumber Alfaria vs. Tower Bersama Infrastructure |
| Multi Indocitra vs. Mitra Pinasthika Mustika | Multi Indocitra vs. Jakarta Int Hotels | Multi Indocitra vs. Asuransi Harta Aman | Multi Indocitra vs. Indosterling Technomedia 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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