Correlation Between Fortune Indonesia and Fks Multi
Can any of the company-specific risk be diversified away by investing in both Fortune Indonesia and Fks Multi 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 Fortune Indonesia and Fks Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortune Indonesia Tbk and Fks Multi Agro, you can compare the effects of market volatilities on Fortune Indonesia and Fks Multi 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 Fortune Indonesia with a short position of Fks Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Indonesia and Fks Multi.
Diversification Opportunities for Fortune Indonesia and Fks Multi
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fortune and Fks is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Indonesia Tbk and Fks Multi Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fks Multi Agro and Fortune Indonesia 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 Fortune Indonesia Tbk are associated (or correlated) with Fks Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fks Multi Agro has no effect on the direction of Fortune Indonesia i.e., Fortune Indonesia and Fks Multi go up and down completely randomly.
Pair Corralation between Fortune Indonesia and Fks Multi
Assuming the 90 days trading horizon Fortune Indonesia Tbk is expected to generate 3.71 times more return on investment than Fks Multi. However, Fortune Indonesia is 3.71 times more volatile than Fks Multi Agro. It trades about 0.27 of its potential returns per unit of risk. Fks Multi Agro is currently generating about 0.18 per unit of risk. If you would invest 13,500 in Fortune Indonesia Tbk on August 25, 2024 and sell it today you would earn a total of 494,000 from holding Fortune Indonesia Tbk or generate 3659.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.54% |
| Values | Daily Returns |
Fortune Indonesia Tbk vs. Fks Multi Agro
Performance |
| Timeline |
| Fortune Indonesia Tbk |
| Fks Multi Agro |
Fortune Indonesia and Fks Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortune Indonesia and Fks Multi
The main advantage of trading using opposite Fortune Indonesia and Fks Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Indonesia position performs unexpectedly, Fks Multi 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 Fks Multi will offset losses from the drop in Fks Multi's long position.| Fortune Indonesia vs. Gema Grahasarana Tbk | Fortune Indonesia vs. Bayu Buana Tbk | Fortune Indonesia vs. Fast Food Indonesia | Fortune Indonesia vs. Mahaka Media Tbk |
| Fks Multi vs. Enseval Putra Megatrading | Fks Multi vs. Fast Food Indonesia | Fks Multi vs. Gema Grahasarana Tbk | Fks Multi vs. Colorpak Indonesia 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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