Correlation Between Multi Bintang and Sumber Global
Can any of the company-specific risk be diversified away by investing in both Multi Bintang and Sumber Global 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 Bintang and Sumber Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Bintang Indonesia and Sumber Global Energy, you can compare the effects of market volatilities on Multi Bintang and Sumber Global 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 Bintang with a short position of Sumber Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Bintang and Sumber Global.
Diversification Opportunities for Multi Bintang and Sumber Global
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Multi and Sumber is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Multi Bintang Indonesia and Sumber Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Global Energy and Multi Bintang 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 Bintang Indonesia are associated (or correlated) with Sumber Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Global Energy has no effect on the direction of Multi Bintang i.e., Multi Bintang and Sumber Global go up and down completely randomly.
Pair Corralation between Multi Bintang and Sumber Global
Assuming the 90 days trading horizon Multi Bintang Indonesia is expected to generate 0.4 times more return on investment than Sumber Global. However, Multi Bintang Indonesia is 2.49 times less risky than Sumber Global. It trades about -0.17 of its potential returns per unit of risk. Sumber Global Energy is currently generating about -0.16 per unit of risk. If you would invest 640,708 in Multi Bintang Indonesia on September 1, 2024 and sell it today you would lose (18,208) from holding Multi Bintang Indonesia or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Bintang Indonesia vs. Sumber Global Energy
Performance |
| Timeline |
| Multi Bintang Indonesia |
| Sumber Global Energy |
Multi Bintang and Sumber Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Bintang and Sumber Global
The main advantage of trading using opposite Multi Bintang and Sumber Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Bintang position performs unexpectedly, Sumber Global 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 Sumber Global will offset losses from the drop in Sumber Global's long position.| Multi Bintang vs. Bank BRISyariah Tbk | Multi Bintang vs. Mitra Pinasthika Mustika | Multi Bintang vs. Jakarta Int Hotels | Multi Bintang vs. Indosterling Technomedia Tbk |
| Sumber Global vs. Golden Eagle Energy | Sumber Global vs. Baramulti Suksessarana Tbk | Sumber Global vs. TBS Energi Utama | Sumber Global vs. Resource Alam Indonesia |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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