Correlation Between Multi Indocitra and Hotel Sahid
Can any of the company-specific risk be diversified away by investing in both Multi Indocitra and Hotel Sahid 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 Hotel Sahid 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 Hotel Sahid Jaya, you can compare the effects of market volatilities on Multi Indocitra and Hotel Sahid 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 Hotel Sahid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Indocitra and Hotel Sahid.
Diversification Opportunities for Multi Indocitra and Hotel Sahid
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Multi and Hotel is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Multi Indocitra Tbk and Hotel Sahid Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Sahid Jaya 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 Hotel Sahid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Sahid Jaya has no effect on the direction of Multi Indocitra i.e., Multi Indocitra and Hotel Sahid go up and down completely randomly.
Pair Corralation between Multi Indocitra and Hotel Sahid
Assuming the 90 days trading horizon Multi Indocitra Tbk is expected to generate 0.69 times more return on investment than Hotel Sahid. However, Multi Indocitra Tbk is 1.46 times less risky than Hotel Sahid. It trades about 0.04 of its potential returns per unit of risk. Hotel Sahid Jaya is currently generating about 0.01 per unit of risk. If you would invest 47,020 in Multi Indocitra Tbk on August 29, 2024 and sell it today you would earn a total of 3,480 from holding Multi Indocitra Tbk or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Indocitra Tbk vs. Hotel Sahid Jaya
Performance |
| Timeline |
| Multi Indocitra Tbk |
| Hotel Sahid Jaya |
Multi Indocitra and Hotel Sahid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Indocitra and Hotel Sahid
The main advantage of trading using opposite Multi Indocitra and Hotel Sahid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Indocitra position performs unexpectedly, Hotel Sahid 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 Hotel Sahid will offset losses from the drop in Hotel Sahid'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 |
| Hotel Sahid vs. Pembangunan Jaya Ancol | Hotel Sahid vs. Panorama Sentrawisata Tbk | Hotel Sahid vs. Millennium Pharmacon International | Hotel Sahid vs. Tempo Inti Media |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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