Correlation Between Metrodata Electronics and Multipolar Technology
Can any of the company-specific risk be diversified away by investing in both Metrodata Electronics and Multipolar Technology 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 Metrodata Electronics and Multipolar Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metrodata Electronics Tbk and Multipolar Technology Tbk, you can compare the effects of market volatilities on Metrodata Electronics and Multipolar Technology 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 Metrodata Electronics with a short position of Multipolar Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrodata Electronics and Multipolar Technology.
Diversification Opportunities for Metrodata Electronics and Multipolar Technology
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metrodata and Multipolar is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Metrodata Electronics Tbk and Multipolar Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multipolar Technology Tbk and Metrodata Electronics 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 Metrodata Electronics Tbk are associated (or correlated) with Multipolar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multipolar Technology Tbk has no effect on the direction of Metrodata Electronics i.e., Metrodata Electronics and Multipolar Technology go up and down completely randomly.
Pair Corralation between Metrodata Electronics and Multipolar Technology
Assuming the 90 days trading horizon Metrodata Electronics Tbk is expected to under-perform the Multipolar Technology. But the stock apears to be less risky and, when comparing its historical volatility, Metrodata Electronics Tbk is 10.95 times less risky than Multipolar Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Multipolar Technology Tbk is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,527,500 in Multipolar Technology Tbk on August 28, 2024 and sell it today you would earn a total of 907,500 from holding Multipolar Technology Tbk or generate 59.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metrodata Electronics Tbk vs. Multipolar Technology Tbk
Performance |
| Timeline |
| Metrodata Electronics Tbk |
| Multipolar Technology Tbk |
Metrodata Electronics and Multipolar Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrodata Electronics and Multipolar Technology
The main advantage of trading using opposite Metrodata Electronics and Multipolar Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrodata Electronics position performs unexpectedly, Multipolar Technology 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 Multipolar Technology will offset losses from the drop in Multipolar Technology's long position.| Metrodata Electronics vs. Multipolar Tbk | Metrodata Electronics vs. Astra Graphia Tbk | Metrodata Electronics vs. Matahari Putra Prima | Metrodata Electronics vs. Ramayana Lestari Sentosa |
| Multipolar Technology vs. Multipolar Tbk | Multipolar Technology vs. Astra Graphia Tbk | Multipolar Technology vs. Matahari Putra Prima | Multipolar Technology vs. Ramayana Lestari Sentosa |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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