Correlation Between Multi Indocitra and Radiant Utama
Can any of the company-specific risk be diversified away by investing in both Multi Indocitra and Radiant 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 Radiant 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 Radiant Utama Interinsco, you can compare the effects of market volatilities on Multi Indocitra and Radiant 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 Radiant Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Indocitra and Radiant Utama.
Diversification Opportunities for Multi Indocitra and Radiant Utama
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Multi and Radiant is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Multi Indocitra Tbk and Radiant Utama Interinsco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Utama Interinsco 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 Radiant Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Utama Interinsco has no effect on the direction of Multi Indocitra i.e., Multi Indocitra and Radiant Utama go up and down completely randomly.
Pair Corralation between Multi Indocitra and Radiant Utama
Assuming the 90 days trading horizon Multi Indocitra Tbk is expected to generate 0.83 times more return on investment than Radiant Utama. However, Multi Indocitra Tbk is 1.21 times less risky than Radiant Utama. It trades about -0.03 of its potential returns per unit of risk. Radiant Utama Interinsco is currently generating about -0.07 per unit of risk. If you would invest 48,800 in Multi Indocitra Tbk on November 27, 2024 and sell it today you would lose (200.00) from holding Multi Indocitra Tbk or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Indocitra Tbk vs. Radiant Utama Interinsco
Performance |
| Timeline |
| Multi Indocitra Tbk |
| Radiant Utama Interinsco |
Multi Indocitra and Radiant Utama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Indocitra and Radiant Utama
The main advantage of trading using opposite Multi Indocitra and Radiant Utama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Indocitra position performs unexpectedly, Radiant 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 Radiant Utama will offset losses from the drop in Radiant 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 |
| Radiant Utama vs. Perdana Karya Perkasa | Radiant Utama vs. Multi Indocitra Tbk | Radiant Utama vs. Rukun Raharja Tbk | Radiant Utama vs. Ricky Putra Globalindo |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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