Correlation Between Sentral Mitra and Multipolar Technology
Can any of the company-specific risk be diversified away by investing in both Sentral Mitra and Multipolar Technology 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 Sentral Mitra and Multipolar Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentral Mitra Informatika and Multipolar Technology Tbk, you can compare the effects of market volatilities on Sentral Mitra and Multipolar Technology 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 Sentral Mitra with a short position of Multipolar Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentral Mitra and Multipolar Technology.
Diversification Opportunities for Sentral Mitra and Multipolar Technology
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sentral and Multipolar is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sentral Mitra Informatika and Multipolar Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multipolar Technology Tbk and Sentral Mitra 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 Sentral Mitra Informatika are associated (or correlated) with Multipolar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multipolar Technology Tbk has no effect on the direction of Sentral Mitra i.e., Sentral Mitra and Multipolar Technology go up and down completely randomly.
Pair Corralation between Sentral Mitra and Multipolar Technology
Assuming the 90 days trading horizon Sentral Mitra is expected to generate 44.21 times less return on investment than Multipolar Technology. But when comparing it to its historical volatility, Sentral Mitra Informatika is 3.53 times less risky than Multipolar Technology. It trades about 0.04 of its potential returns per unit of risk. Multipolar Technology Tbk is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 1,740,000 in Multipolar Technology Tbk on November 27, 2024 and sell it today you would earn a total of 2,087,500 from holding Multipolar Technology Tbk or generate 119.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentral Mitra Informatika vs. Multipolar Technology Tbk
Performance |
| Timeline |
| Sentral Mitra Informatika |
| Multipolar Technology Tbk |
Sentral Mitra and Multipolar Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentral Mitra and Multipolar Technology
The main advantage of trading using opposite Sentral Mitra and Multipolar Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentral Mitra position performs unexpectedly, Multipolar Technology 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 Multipolar Technology will offset losses from the drop in Multipolar Technology's long position.| Sentral Mitra vs. Kioson Komersial Indonesia | Sentral Mitra vs. Multipolar Technology Tbk | Sentral Mitra vs. Hensel Davest Indonesia | Sentral Mitra vs. NFC Indonesia PT |
| Multipolar Technology vs. Link Net Tbk | Multipolar Technology vs. Metrodata Electronics Tbk | Multipolar Technology vs. Mitra Pinasthika Mustika | Multipolar Technology vs. Multipolar 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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