Correlation Between Multistrada Arah and Emdeki Utama
Can any of the company-specific risk be diversified away by investing in both Multistrada Arah and Emdeki Utama 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 Multistrada Arah and Emdeki Utama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multistrada Arah Sarana and Emdeki Utama Tbk, you can compare the effects of market volatilities on Multistrada Arah and Emdeki Utama 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 Multistrada Arah with a short position of Emdeki Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multistrada Arah and Emdeki Utama.
Diversification Opportunities for Multistrada Arah and Emdeki Utama
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Multistrada and Emdeki is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Multistrada Arah Sarana and Emdeki Utama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emdeki Utama Tbk and Multistrada Arah 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 Multistrada Arah Sarana are associated (or correlated) with Emdeki Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emdeki Utama Tbk has no effect on the direction of Multistrada Arah i.e., Multistrada Arah and Emdeki Utama go up and down completely randomly.
Pair Corralation between Multistrada Arah and Emdeki Utama
Assuming the 90 days trading horizon Multistrada Arah Sarana is expected to generate 4.29 times more return on investment than Emdeki Utama. However, Multistrada Arah is 4.29 times more volatile than Emdeki Utama Tbk. It trades about 0.05 of its potential returns per unit of risk. Emdeki Utama Tbk is currently generating about 0.0 per unit of risk. If you would invest 384,095 in Multistrada Arah Sarana on August 31, 2024 and sell it today you would earn a total of 235,905 from holding Multistrada Arah Sarana or generate 61.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multistrada Arah Sarana vs. Emdeki Utama Tbk
Performance |
| Timeline |
| Multistrada Arah Sarana |
| Emdeki Utama Tbk |
Multistrada Arah and Emdeki Utama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multistrada Arah and Emdeki Utama
The main advantage of trading using opposite Multistrada Arah and Emdeki Utama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multistrada Arah position performs unexpectedly, Emdeki Utama 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 Emdeki Utama will offset losses from the drop in Emdeki Utama's long position.| Multistrada Arah vs. Gajah Tunggal Tbk | Multistrada Arah vs. Kawasan Industri Jababeka | Multistrada Arah vs. PT Sreeya Sewu | Multistrada Arah vs. Nusantara Infrastructure Tbk |
| Emdeki Utama vs. Panca Budi Idaman | Emdeki Utama vs. Intanwijaya Internasional Tbk | Emdeki Utama vs. Hartadinata Abadi Tbk | Emdeki Utama vs. Unggul Indah Cahaya |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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