Correlation Between Multi Indocitra and Hero Supermarket
Can any of the company-specific risk be diversified away by investing in both Multi Indocitra and Hero Supermarket 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 Indocitra and Hero Supermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Indocitra Tbk and Hero Supermarket Tbk, you can compare the effects of market volatilities on Multi Indocitra and Hero Supermarket 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 Indocitra with a short position of Hero Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Indocitra and Hero Supermarket.
Diversification Opportunities for Multi Indocitra and Hero Supermarket
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Multi and Hero is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Multi Indocitra Tbk and Hero Supermarket Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hero Supermarket Tbk and Multi Indocitra 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 Indocitra Tbk are associated (or correlated) with Hero Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hero Supermarket Tbk has no effect on the direction of Multi Indocitra i.e., Multi Indocitra and Hero Supermarket go up and down completely randomly.
Pair Corralation between Multi Indocitra and Hero Supermarket
Assuming the 90 days trading horizon Multi Indocitra Tbk is expected to generate 0.52 times more return on investment than Hero Supermarket. However, Multi Indocitra Tbk is 1.94 times less risky than Hero Supermarket. It trades about 0.18 of its potential returns per unit of risk. Hero Supermarket Tbk is currently generating about -0.33 per unit of risk. If you would invest 50,000 in Multi Indocitra Tbk on September 1, 2024 and sell it today you would earn a total of 2,000 from holding Multi Indocitra Tbk or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Indocitra Tbk vs. Hero Supermarket Tbk
Performance |
| Timeline |
| Multi Indocitra Tbk |
| Hero Supermarket Tbk |
Multi Indocitra and Hero Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Indocitra and Hero Supermarket
The main advantage of trading using opposite Multi Indocitra and Hero Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Indocitra position performs unexpectedly, Hero Supermarket 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 Hero Supermarket will offset losses from the drop in Hero Supermarket's long position.| Multi Indocitra vs. Japfa Comfeed Indonesia | Multi Indocitra vs. Charoen Pokphand Indonesia | Multi Indocitra vs. Erajaya Swasembada Tbk | Multi Indocitra vs. Indofood Cbp Sukses |
| Hero Supermarket vs. Bank BRISyariah Tbk | Hero Supermarket vs. Mitra Pinasthika Mustika | Hero Supermarket vs. Jakarta Int Hotels | Hero Supermarket vs. Indosterling Technomedia 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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