Correlation Between Ramayana Lestari and Multipolar Technology
Can any of the company-specific risk be diversified away by investing in both Ramayana Lestari 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 Ramayana Lestari and Multipolar Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramayana Lestari Sentosa and Multipolar Technology Tbk, you can compare the effects of market volatilities on Ramayana Lestari 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 Ramayana Lestari with a short position of Multipolar Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramayana Lestari and Multipolar Technology.
Diversification Opportunities for Ramayana Lestari and Multipolar Technology
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ramayana and Multipolar is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ramayana Lestari Sentosa 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 Ramayana Lestari 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 Ramayana Lestari Sentosa 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 Ramayana Lestari i.e., Ramayana Lestari and Multipolar Technology go up and down completely randomly.
Pair Corralation between Ramayana Lestari and Multipolar Technology
Assuming the 90 days trading horizon Ramayana Lestari Sentosa is expected to under-perform the Multipolar Technology. But the stock apears to be less risky and, when comparing its historical volatility, Ramayana Lestari Sentosa is 2.79 times less risky than Multipolar Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Multipolar Technology Tbk is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 164,674 in Multipolar Technology Tbk on August 27, 2024 and sell it today you would earn a total of 2,335,326 from holding Multipolar Technology Tbk or generate 1418.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ramayana Lestari Sentosa vs. Multipolar Technology Tbk
Performance |
| Timeline |
| Ramayana Lestari Sentosa |
| Multipolar Technology Tbk |
Ramayana Lestari and Multipolar Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramayana Lestari and Multipolar Technology
The main advantage of trading using opposite Ramayana Lestari and Multipolar Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramayana Lestari 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.| Ramayana Lestari vs. Mitra Adiperkasa Tbk | Ramayana Lestari vs. Matahari Putra Prima | Ramayana Lestari vs. Summarecon Agung Tbk | Ramayana Lestari vs. Ciputra Development Tbk |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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