Correlation Between Multi Prima and Ricky Putra
Can any of the company-specific risk be diversified away by investing in both Multi Prima and Ricky Putra 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 Ricky Putra 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 Ricky Putra Globalindo, you can compare the effects of market volatilities on Multi Prima and Ricky Putra 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 Ricky Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Prima and Ricky Putra.
Diversification Opportunities for Multi Prima and Ricky Putra
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Multi and Ricky is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Multi Prima Sejahtera and Ricky Putra Globalindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ricky Putra Globalindo 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 Ricky Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ricky Putra Globalindo has no effect on the direction of Multi Prima i.e., Multi Prima and Ricky Putra go up and down completely randomly.
Pair Corralation between Multi Prima and Ricky Putra
Assuming the 90 days trading horizon Multi Prima is expected to generate 1.14 times less return on investment than Ricky Putra. But when comparing it to its historical volatility, Multi Prima Sejahtera is 2.84 times less risky than Ricky Putra. It trades about 0.03 of its potential returns per unit of risk. Ricky Putra Globalindo is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,100 in Ricky Putra Globalindo on August 31, 2024 and sell it today you would lose (1,700) from holding Ricky Putra Globalindo or give up 18.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Prima Sejahtera vs. Ricky Putra Globalindo
Performance |
| Timeline |
| Multi Prima Sejahtera |
| Ricky Putra Globalindo |
Multi Prima and Ricky Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Prima and Ricky Putra
The main advantage of trading using opposite Multi Prima and Ricky Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Prima position performs unexpectedly, Ricky Putra 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 Ricky Putra will offset losses from the drop in Ricky Putra'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 |
| Ricky Putra vs. Pan Brothers Tbk | Ricky Putra vs. Sunson Textile Manufacturer | Ricky Putra vs. Asia Pacific Fibers | Ricky Putra vs. Prima Alloy Steel |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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