Correlation Between Multi Indocitra and Multi Hanna
Can any of the company-specific risk be diversified away by investing in both Multi Indocitra and Multi Hanna 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 Multi Hanna 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 Multi Hanna Kreasindo, you can compare the effects of market volatilities on Multi Indocitra and Multi Hanna 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 Multi Hanna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Indocitra and Multi Hanna.
Diversification Opportunities for Multi Indocitra and Multi Hanna
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multi and Multi is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Multi Indocitra Tbk and Multi Hanna Kreasindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Hanna Kreasindo 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 Multi Hanna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Hanna Kreasindo has no effect on the direction of Multi Indocitra i.e., Multi Indocitra and Multi Hanna go up and down completely randomly.
Pair Corralation between Multi Indocitra and Multi Hanna
Assuming the 90 days trading horizon Multi Indocitra is expected to generate 88.62 times less return on investment than Multi Hanna. But when comparing it to its historical volatility, Multi Indocitra Tbk is 4.76 times less risky than Multi Hanna. It trades about 0.0 of its potential returns per unit of risk. Multi Hanna Kreasindo is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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 | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Multi Indocitra Tbk vs. Multi Hanna Kreasindo
Performance |
| Timeline |
| Multi Indocitra Tbk |
| Multi Hanna Kreasindo |
Multi Indocitra and Multi Hanna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Indocitra and Multi Hanna
The main advantage of trading using opposite Multi Indocitra and Multi Hanna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Indocitra position performs unexpectedly, Multi Hanna 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 Hanna will offset losses from the drop in Multi Hanna'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 |
| Multi Hanna vs. Mahaka Media Tbk | Multi Hanna vs. PT Hetzer Medical | Multi Hanna vs. Indosterling Technomedia Tbk | Multi Hanna vs. Ashmore Asset Management |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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