Correlation Between Multipolar Technology and Indointernet Tbk
Can any of the company-specific risk be diversified away by investing in both Multipolar Technology and Indointernet Tbk 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 Technology and Indointernet Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multipolar Technology Tbk and Indointernet Tbk PT, you can compare the effects of market volatilities on Multipolar Technology and Indointernet Tbk 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 Technology with a short position of Indointernet Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multipolar Technology and Indointernet Tbk.
Diversification Opportunities for Multipolar Technology and Indointernet Tbk
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multipolar and Indointernet is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Multipolar Technology Tbk and Indointernet Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indointernet Tbk and Multipolar Technology 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 Technology Tbk are associated (or correlated) with Indointernet Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indointernet Tbk has no effect on the direction of Multipolar Technology i.e., Multipolar Technology and Indointernet Tbk go up and down completely randomly.
Pair Corralation between Multipolar Technology and Indointernet Tbk
Assuming the 90 days trading horizon Multipolar Technology is expected to generate 3.16 times less return on investment than Indointernet Tbk. But when comparing it to its historical volatility, Multipolar Technology Tbk is 10.03 times less risky than Indointernet Tbk. It trades about 0.14 of its potential returns per unit of risk. Indointernet Tbk PT is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 391,500 in Indointernet Tbk PT on November 5, 2024 and sell it today you would lose (16,500) from holding Indointernet Tbk PT or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multipolar Technology Tbk vs. Indointernet Tbk PT
Performance |
| Timeline |
| Multipolar Technology Tbk |
| Indointernet Tbk |
Multipolar Technology and Indointernet Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multipolar Technology and Indointernet Tbk
The main advantage of trading using opposite Multipolar Technology and Indointernet Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multipolar Technology position performs unexpectedly, Indointernet Tbk 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 Indointernet Tbk will offset losses from the drop in Indointernet Tbk's long position.| Multipolar Technology vs. Link Net Tbk | Multipolar Technology vs. Metrodata Electronics Tbk | Multipolar Technology vs. Mitra Pinasthika Mustika | Multipolar Technology vs. Multipolar Tbk |
| Indointernet Tbk vs. DCI Indonesia Tbk | Indointernet Tbk vs. Digital Mediatama Maxima | Indointernet Tbk vs. Multipolar Technology Tbk | Indointernet Tbk vs. Bank Net 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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