Correlation Between Multi Indocitra and Midi Utama
Can any of the company-specific risk be diversified away by investing in both Multi Indocitra and Midi Utama 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 Midi Utama 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 Midi Utama Indonesia, you can compare the effects of market volatilities on Multi Indocitra and Midi Utama 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 Midi Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Indocitra and Midi Utama.
Diversification Opportunities for Multi Indocitra and Midi Utama
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multi and Midi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Multi Indocitra Tbk and Midi Utama Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midi Utama Indonesia 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 Midi Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midi Utama Indonesia has no effect on the direction of Multi Indocitra i.e., Multi Indocitra and Midi Utama go up and down completely randomly.
Pair Corralation between Multi Indocitra and Midi Utama
Assuming the 90 days trading horizon Multi Indocitra Tbk is expected to under-perform the Midi Utama. But the stock apears to be less risky and, when comparing its historical volatility, Multi Indocitra Tbk is 1.06 times less risky than Midi Utama. The stock trades about -0.01 of its potential returns per unit of risk. The Midi Utama Indonesia is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 36,147 in Midi Utama Indonesia on November 27, 2024 and sell it today you would earn a total of 2,253 from holding Midi Utama Indonesia or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Multi Indocitra Tbk vs. Midi Utama Indonesia
Performance |
| Timeline |
| Multi Indocitra Tbk |
| Midi Utama Indonesia |
Multi Indocitra and Midi Utama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Indocitra and Midi Utama
The main advantage of trading using opposite Multi Indocitra and Midi Utama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Indocitra position performs unexpectedly, Midi Utama 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 Midi Utama will offset losses from the drop in Midi Utama'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 |
| Midi Utama vs. Sumber Alfaria Trijaya | Midi Utama vs. Hero Supermarket Tbk | Midi Utama vs. Supra Boga Lestari | Midi Utama 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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