Correlation Between Multi Indocitra and Perdana Bangun
Can any of the company-specific risk be diversified away by investing in both Multi Indocitra and Perdana Bangun 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 Perdana Bangun 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 Perdana Bangun Pusaka, you can compare the effects of market volatilities on Multi Indocitra and Perdana Bangun 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 Perdana Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Indocitra and Perdana Bangun.
Diversification Opportunities for Multi Indocitra and Perdana Bangun
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Multi and Perdana is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Multi Indocitra Tbk and Perdana Bangun Pusaka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdana Bangun Pusaka 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 Perdana Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdana Bangun Pusaka has no effect on the direction of Multi Indocitra i.e., Multi Indocitra and Perdana Bangun go up and down completely randomly.
Pair Corralation between Multi Indocitra and Perdana Bangun
Assuming the 90 days trading horizon Multi Indocitra is expected to generate 60.55 times less return on investment than Perdana Bangun. But when comparing it to its historical volatility, Multi Indocitra Tbk is 13.76 times less risky than Perdana Bangun. It trades about 0.08 of its potential returns per unit of risk. Perdana Bangun Pusaka is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 87,000 in Perdana Bangun Pusaka on August 28, 2024 and sell it today you would earn a total of 97,000 from holding Perdana Bangun Pusaka or generate 111.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Indocitra Tbk vs. Perdana Bangun Pusaka
Performance |
| Timeline |
| Multi Indocitra Tbk |
| Perdana Bangun Pusaka |
Multi Indocitra and Perdana Bangun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Indocitra and Perdana Bangun
The main advantage of trading using opposite Multi Indocitra and Perdana Bangun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Indocitra position performs unexpectedly, Perdana Bangun 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 Perdana Bangun will offset losses from the drop in Perdana Bangun'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 |
| Perdana Bangun vs. Inter Delta Tbk | Perdana Bangun vs. Jakarta Setiabudi Internasional | Perdana Bangun vs. Modern Internasional Tbk | Perdana Bangun vs. Multi Indocitra 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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