Correlation Between Multi Hanna and Multi Bintang
Can any of the company-specific risk be diversified away by investing in both Multi Hanna and Multi Bintang 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 Hanna and Multi Bintang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Hanna Kreasindo and Multi Bintang Indonesia, you can compare the effects of market volatilities on Multi Hanna and Multi Bintang 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 Hanna with a short position of Multi Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Hanna and Multi Bintang.
Diversification Opportunities for Multi Hanna and Multi Bintang
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Multi and Multi is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Multi Hanna Kreasindo and Multi Bintang Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Bintang Indonesia and Multi Hanna 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 Hanna Kreasindo are associated (or correlated) with Multi Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Bintang Indonesia has no effect on the direction of Multi Hanna i.e., Multi Hanna and Multi Bintang go up and down completely randomly.
Pair Corralation between Multi Hanna and Multi Bintang
Assuming the 90 days trading horizon Multi Hanna Kreasindo is expected to generate 3.09 times more return on investment than Multi Bintang. However, Multi Hanna is 3.09 times more volatile than Multi Bintang Indonesia. It trades about 0.07 of its potential returns per unit of risk. Multi Bintang Indonesia is currently generating about 0.04 per unit of risk. If you would invest 9,700 in Multi Hanna Kreasindo on November 29, 2024 and sell it today you would earn a total of 400.00 from holding Multi Hanna Kreasindo or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Multi Hanna Kreasindo vs. Multi Bintang Indonesia
Performance |
| Timeline |
| Multi Hanna Kreasindo |
| Multi Bintang Indonesia |
Multi Hanna and Multi Bintang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Hanna and Multi Bintang
The main advantage of trading using opposite Multi Hanna and Multi Bintang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Hanna position performs unexpectedly, Multi Bintang 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 Multi Bintang will offset losses from the drop in Multi Bintang's long position.| Multi Hanna vs. Mahaka Media Tbk | Multi Hanna vs. PT Hetzer Medical | Multi Hanna vs. Indosterling Technomedia Tbk | Multi Hanna vs. Ashmore Asset Management |
| Multi Bintang vs. Delta Djakarta Tbk | Multi Bintang vs. Merck Tbk | Multi Bintang vs. Mayora Indah Tbk | Multi Bintang vs. Ultra Jaya Milk |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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