Correlation Between Multi Prima and Indospring Tbk
Can any of the company-specific risk be diversified away by investing in both Multi Prima and Indospring Tbk 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 Multi Prima and Indospring Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Prima Sejahtera and Indospring Tbk, you can compare the effects of market volatilities on Multi Prima and Indospring Tbk 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 Multi Prima with a short position of Indospring Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Prima and Indospring Tbk.
Diversification Opportunities for Multi Prima and Indospring Tbk
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Multi and Indospring is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Multi Prima Sejahtera and Indospring Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indospring Tbk and Multi Prima 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 Multi Prima Sejahtera are associated (or correlated) with Indospring Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indospring Tbk has no effect on the direction of Multi Prima i.e., Multi Prima and Indospring Tbk go up and down completely randomly.
Pair Corralation between Multi Prima and Indospring Tbk
Assuming the 90 days trading horizon Multi Prima Sejahtera is expected to generate 0.95 times more return on investment than Indospring Tbk. However, Multi Prima Sejahtera is 1.05 times less risky than Indospring Tbk. It trades about -0.11 of its potential returns per unit of risk. Indospring Tbk is currently generating about -0.38 per unit of risk. If you would invest 41,200 in Multi Prima Sejahtera on September 2, 2024 and sell it today you would lose (1,800) from holding Multi Prima Sejahtera or give up 4.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Prima Sejahtera vs. Indospring Tbk
Performance |
| Timeline |
| Multi Prima Sejahtera |
| Indospring Tbk |
Multi Prima and Indospring Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Prima and Indospring Tbk
The main advantage of trading using opposite Multi Prima and Indospring Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Prima position performs unexpectedly, Indospring Tbk 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 Indospring Tbk will offset losses from the drop in Indospring Tbk's long position.| Multi Prima vs. Indospring Tbk | Multi Prima vs. Prima Alloy Steel | Multi Prima vs. Kabelindo Murni Tbk | Multi Prima vs. Multistrada Arah Sarana |
| Indospring Tbk vs. Japfa Comfeed Indonesia | Indospring Tbk vs. Charoen Pokphand Indonesia | Indospring Tbk vs. Erajaya Swasembada Tbk | Indospring Tbk vs. Indofood Cbp Sukses |
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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