Correlation Between Multifiling Mitra and Bank Nationalnobu
Can any of the company-specific risk be diversified away by investing in both Multifiling Mitra and Bank Nationalnobu 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 Multifiling Mitra and Bank Nationalnobu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multifiling Mitra Indonesia and Bank Nationalnobu Tbk, you can compare the effects of market volatilities on Multifiling Mitra and Bank Nationalnobu 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 Multifiling Mitra with a short position of Bank Nationalnobu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multifiling Mitra and Bank Nationalnobu.
Diversification Opportunities for Multifiling Mitra and Bank Nationalnobu
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multifiling and Bank is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Multifiling Mitra Indonesia and Bank Nationalnobu Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Nationalnobu Tbk and Multifiling 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 Multifiling Mitra Indonesia are associated (or correlated) with Bank Nationalnobu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Nationalnobu Tbk has no effect on the direction of Multifiling Mitra i.e., Multifiling Mitra and Bank Nationalnobu go up and down completely randomly.
Pair Corralation between Multifiling Mitra and Bank Nationalnobu
Assuming the 90 days trading horizon Multifiling Mitra Indonesia is expected to generate 1.73 times more return on investment than Bank Nationalnobu. However, Multifiling Mitra is 1.73 times more volatile than Bank Nationalnobu Tbk. It trades about 0.23 of its potential returns per unit of risk. Bank Nationalnobu Tbk is currently generating about -0.05 per unit of risk. If you would invest 110,000 in Multifiling Mitra Indonesia on August 26, 2024 and sell it today you would earn a total of 15,000 from holding Multifiling Mitra Indonesia or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Multifiling Mitra Indonesia vs. Bank Nationalnobu Tbk
Performance |
| Timeline |
| Multifiling Mitra |
| Bank Nationalnobu Tbk |
Multifiling Mitra and Bank Nationalnobu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multifiling Mitra and Bank Nationalnobu
The main advantage of trading using opposite Multifiling Mitra and Bank Nationalnobu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multifiling Mitra position performs unexpectedly, Bank Nationalnobu 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 Bank Nationalnobu will offset losses from the drop in Bank Nationalnobu's long position.| Multifiling Mitra vs. Rukun Raharja Tbk | Multifiling Mitra vs. PT Temas Tbk | Multifiling Mitra vs. Weha Transportasi Indonesia |
| Bank Nationalnobu vs. Paninvest Tbk | Bank Nationalnobu vs. Panin Sekuritas Tbk | Bank Nationalnobu vs. Wahana Ottomitra Multiartha | Bank Nationalnobu vs. Lenox Pasifik Investama |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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