Correlation Between Asia Pacific and Multi Prima
Can any of the company-specific risk be diversified away by investing in both Asia Pacific and Multi Prima 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 Asia Pacific and Multi Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Pacific Investama and Multi Prima Sejahtera, you can compare the effects of market volatilities on Asia Pacific and Multi Prima 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 Asia Pacific with a short position of Multi Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Pacific and Multi Prima.
Diversification Opportunities for Asia Pacific and Multi Prima
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Multi is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pacific Investama and Multi Prima Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Prima Sejahtera and Asia Pacific 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 Asia Pacific Investama are associated (or correlated) with Multi Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Prima Sejahtera has no effect on the direction of Asia Pacific i.e., Asia Pacific and Multi Prima go up and down completely randomly.
Pair Corralation between Asia Pacific and Multi Prima
Assuming the 90 days trading horizon Asia Pacific Investama is expected to under-perform the Multi Prima. In addition to that, Asia Pacific is 2.42 times more volatile than Multi Prima Sejahtera. It trades about -0.03 of its total potential returns per unit of risk. Multi Prima Sejahtera is currently generating about 0.03 per unit of volatility. If you would invest 36,045 in Multi Prima Sejahtera on August 31, 2024 and sell it today you would earn a total of 3,955 from holding Multi Prima Sejahtera or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Pacific Investama vs. Multi Prima Sejahtera
Performance |
| Timeline |
| Asia Pacific Investama |
| Multi Prima Sejahtera |
Asia Pacific and Multi Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Pacific and Multi Prima
The main advantage of trading using opposite Asia Pacific and Multi Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Pacific position performs unexpectedly, Multi Prima 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 Multi Prima will offset losses from the drop in Multi Prima's long position.| Asia Pacific vs. Pan Brothers Tbk | Asia Pacific vs. Asia Pacific Fibers | Asia Pacific vs. Ricky Putra Globalindo | Asia Pacific vs. Prima Alloy Steel |
| Multi Prima vs. Indospring Tbk | Multi Prima vs. Prima Alloy Steel | Multi Prima vs. Kabelindo Murni Tbk | Multi Prima vs. Multistrada Arah Sarana |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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