Correlation Between Panorama Sentrawisata and Multi Indocitra
Can any of the company-specific risk be diversified away by investing in both Panorama Sentrawisata and Multi Indocitra 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 Panorama Sentrawisata and Multi Indocitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panorama Sentrawisata Tbk and Multi Indocitra Tbk, you can compare the effects of market volatilities on Panorama Sentrawisata and Multi Indocitra 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 Panorama Sentrawisata with a short position of Multi Indocitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panorama Sentrawisata and Multi Indocitra.
Diversification Opportunities for Panorama Sentrawisata and Multi Indocitra
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Panorama and Multi is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Panorama Sentrawisata Tbk and Multi Indocitra Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Indocitra Tbk and Panorama Sentrawisata 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 Panorama Sentrawisata Tbk are associated (or correlated) with Multi Indocitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Indocitra Tbk has no effect on the direction of Panorama Sentrawisata i.e., Panorama Sentrawisata and Multi Indocitra go up and down completely randomly.
Pair Corralation between Panorama Sentrawisata and Multi Indocitra
Assuming the 90 days trading horizon Panorama Sentrawisata Tbk is expected to generate 0.53 times more return on investment than Multi Indocitra. However, Panorama Sentrawisata Tbk is 1.89 times less risky than Multi Indocitra. It trades about 0.23 of its potential returns per unit of risk. Multi Indocitra Tbk is currently generating about 0.04 per unit of risk. If you would invest 39,800 in Panorama Sentrawisata Tbk on August 29, 2024 and sell it today you would earn a total of 12,200 from holding Panorama Sentrawisata Tbk or generate 30.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panorama Sentrawisata Tbk vs. Multi Indocitra Tbk
Performance |
| Timeline |
| Panorama Sentrawisata Tbk |
| Multi Indocitra Tbk |
Panorama Sentrawisata and Multi Indocitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panorama Sentrawisata and Multi Indocitra
The main advantage of trading using opposite Panorama Sentrawisata and Multi Indocitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panorama Sentrawisata position performs unexpectedly, Multi Indocitra 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 Indocitra will offset losses from the drop in Multi Indocitra's long position.| Panorama Sentrawisata vs. Pembangunan Jaya Ancol | Panorama Sentrawisata vs. Hotel Sahid Jaya | Panorama Sentrawisata vs. Pudjiadi Sons Tbk | Panorama Sentrawisata vs. Pioneerindo Gourmet International |
| Multi Indocitra vs. Lautan Luas Tbk | Multi Indocitra vs. Pembangunan Jaya Ancol | Multi Indocitra vs. Modern Internasional Tbk | Multi Indocitra vs. Mustika Ratu 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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