Correlation Between Multi Makmur and Bank Central
Can any of the company-specific risk be diversified away by investing in both Multi Makmur and Bank Central 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 Multi Makmur and Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Makmur Lemindo and Bank Central Asia, you can compare the effects of market volatilities on Multi Makmur and Bank Central 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 Multi Makmur with a short position of Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Makmur and Bank Central.
Diversification Opportunities for Multi Makmur and Bank Central
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Multi and Bank is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Multi Makmur Lemindo and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia and Multi Makmur 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 Multi Makmur Lemindo are associated (or correlated) with Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Multi Makmur i.e., Multi Makmur and Bank Central go up and down completely randomly.
Pair Corralation between Multi Makmur and Bank Central
Assuming the 90 days trading horizon Multi Makmur Lemindo is expected to under-perform the Bank Central. In addition to that, Multi Makmur is 4.02 times more volatile than Bank Central Asia. It trades about -0.11 of its total potential returns per unit of risk. Bank Central Asia is currently generating about 0.04 per unit of volatility. If you would invest 825,661 in Bank Central Asia on September 2, 2024 and sell it today you would earn a total of 174,339 from holding Bank Central Asia or generate 21.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 82.91% |
| Values | Daily Returns |
Multi Makmur Lemindo vs. Bank Central Asia
Performance |
| Timeline |
| Multi Makmur Lemindo |
| Bank Central Asia |
Multi Makmur and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Makmur and Bank Central
The main advantage of trading using opposite Multi Makmur and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Makmur position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central's long position.| Multi Makmur vs. Ashmore Asset Management | Multi Makmur vs. PT Boston Furniture | Multi Makmur vs. Indo Acidatama Tbk | Multi Makmur vs. PT Charlie Hospital |
| Bank Central vs. Ace Hardware Indonesia | Bank Central vs. Merdeka Copper Gold | Bank Central vs. Mitra Pinasthika Mustika | Bank Central vs. Jakarta Int Hotels |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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