Correlation Between Multifiling Mitra and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Multifiling Mitra and Weha Transportasi 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 Weha Transportasi 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 Weha Transportasi Indonesia, you can compare the effects of market volatilities on Multifiling Mitra and Weha Transportasi 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 Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multifiling Mitra and Weha Transportasi.
Diversification Opportunities for Multifiling Mitra and Weha Transportasi
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Multifiling and Weha is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Multifiling Mitra Indonesia and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi 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 Weha Transportasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weha Transportasi has no effect on the direction of Multifiling Mitra i.e., Multifiling Mitra and Weha Transportasi go up and down completely randomly.
Pair Corralation between Multifiling Mitra and Weha Transportasi
Assuming the 90 days trading horizon Multifiling Mitra Indonesia is expected to generate 0.85 times more return on investment than Weha Transportasi. However, Multifiling Mitra Indonesia is 1.18 times less risky than Weha Transportasi. It trades about 0.09 of its potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about -0.37 per unit of risk. If you would invest 120,500 in Multifiling Mitra Indonesia on August 29, 2024 and sell it today you would earn a total of 4,500 from holding Multifiling Mitra Indonesia or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multifiling Mitra Indonesia vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Multifiling Mitra |
| Weha Transportasi |
Multifiling Mitra and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multifiling Mitra and Weha Transportasi
The main advantage of trading using opposite Multifiling Mitra and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multifiling Mitra position performs unexpectedly, Weha Transportasi 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 Weha Transportasi will offset losses from the drop in Weha Transportasi's long position.| Multifiling Mitra vs. Midi Utama Indonesia | Multifiling Mitra vs. Jasuindo Tiga Perkasa | Multifiling Mitra vs. Multi Indocitra Tbk | Multifiling Mitra vs. Kokoh Inti Arebama |
| Weha Transportasi vs. Samudera Indonesia Tbk | Weha Transportasi vs. Pelayaran Nelly Dwi | Weha Transportasi vs. Buana Listya Tama | Weha Transportasi vs. Mitrabahtera Segara Sejati |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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