Correlation Between Multi Indocitra and First Media
Can any of the company-specific risk be diversified away by investing in both Multi Indocitra and First Media 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 First Media 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 First Media Tbk, you can compare the effects of market volatilities on Multi Indocitra and First Media 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 First Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Indocitra and First Media.
Diversification Opportunities for Multi Indocitra and First Media
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and First is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Multi Indocitra Tbk and First Media Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Media 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 First Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Media Tbk has no effect on the direction of Multi Indocitra i.e., Multi Indocitra and First Media go up and down completely randomly.
Pair Corralation between Multi Indocitra and First Media
Assuming the 90 days trading horizon Multi Indocitra Tbk is expected to under-perform the First Media. But the stock apears to be less risky and, when comparing its historical volatility, Multi Indocitra Tbk is 1.43 times less risky than First Media. The stock trades about -0.03 of its potential returns per unit of risk. The First Media Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8,500 in First Media Tbk on November 27, 2024 and sell it today you would earn a total of 0.00 from holding First Media Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Indocitra Tbk vs. First Media Tbk
Performance |
| Timeline |
| Multi Indocitra Tbk |
| First Media Tbk |
Multi Indocitra and First Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Indocitra and First Media
The main advantage of trading using opposite Multi Indocitra and First Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Indocitra position performs unexpectedly, First Media 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 First Media will offset losses from the drop in First Media's long position.| Multi Indocitra vs. Lautan Luas Tbk | Multi Indocitra vs. Pembangunan Jaya Ancol | Multi Indocitra vs. Modern Internasional Tbk | Multi Indocitra vs. Mustika Ratu Tbk |
| First Media vs. Metro Healthcare Indonesia | First Media vs. Indosterling Technomedia Tbk | First Media vs. Anabatic Technologies Tbk | First Media vs. PT Hatten Bali |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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