Correlation Between Multipolar Tbk and Lenox Pasifik
Can any of the company-specific risk be diversified away by investing in both Multipolar Tbk and Lenox Pasifik 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 Multipolar Tbk and Lenox Pasifik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multipolar Tbk and Lenox Pasifik Investama, you can compare the effects of market volatilities on Multipolar Tbk and Lenox Pasifik 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 Multipolar Tbk with a short position of Lenox Pasifik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multipolar Tbk and Lenox Pasifik.
Diversification Opportunities for Multipolar Tbk and Lenox Pasifik
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Multipolar and Lenox is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Multipolar Tbk and Lenox Pasifik Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenox Pasifik Investama and Multipolar Tbk 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 Multipolar Tbk are associated (or correlated) with Lenox Pasifik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenox Pasifik Investama has no effect on the direction of Multipolar Tbk i.e., Multipolar Tbk and Lenox Pasifik go up and down completely randomly.
Pair Corralation between Multipolar Tbk and Lenox Pasifik
Assuming the 90 days trading horizon Multipolar Tbk is expected to under-perform the Lenox Pasifik. In addition to that, Multipolar Tbk is 1.59 times more volatile than Lenox Pasifik Investama. It trades about -0.13 of its total potential returns per unit of risk. Lenox Pasifik Investama is currently generating about -0.15 per unit of volatility. If you would invest 8,600 in Lenox Pasifik Investama on August 29, 2024 and sell it today you would lose (1,900) from holding Lenox Pasifik Investama or give up 22.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multipolar Tbk vs. Lenox Pasifik Investama
Performance |
| Timeline |
| Multipolar Tbk |
| Lenox Pasifik Investama |
Multipolar Tbk and Lenox Pasifik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multipolar Tbk and Lenox Pasifik
The main advantage of trading using opposite Multipolar Tbk and Lenox Pasifik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multipolar Tbk position performs unexpectedly, Lenox Pasifik 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 Lenox Pasifik will offset losses from the drop in Lenox Pasifik's long position.| Multipolar Tbk vs. Matahari Putra Prima | Multipolar Tbk vs. Mnc Investama Tbk | Multipolar Tbk vs. Kawasan Industri Jababeka | Multipolar Tbk vs. Lippo Karawaci Tbk |
| Lenox Pasifik vs. Star Pacific Tbk | Lenox Pasifik vs. Multipolar Tbk | Lenox Pasifik vs. Lippo General Insurance | Lenox Pasifik vs. Paninvest 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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