Correlation Between Sekar Laut and Multi Bintang
Can any of the company-specific risk be diversified away by investing in both Sekar Laut and Multi Bintang 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 Sekar Laut and Multi Bintang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sekar Laut Tbk and Multi Bintang Indonesia, you can compare the effects of market volatilities on Sekar Laut and Multi Bintang 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 Sekar Laut with a short position of Multi Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekar Laut and Multi Bintang.
Diversification Opportunities for Sekar Laut and Multi Bintang
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sekar and Multi is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sekar Laut Tbk and Multi Bintang Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Bintang Indonesia and Sekar Laut 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 Sekar Laut Tbk are associated (or correlated) with Multi Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Bintang Indonesia has no effect on the direction of Sekar Laut i.e., Sekar Laut and Multi Bintang go up and down completely randomly.
Pair Corralation between Sekar Laut and Multi Bintang
Assuming the 90 days trading horizon Sekar Laut Tbk is expected to under-perform the Multi Bintang. In addition to that, Sekar Laut is 11.97 times more volatile than Multi Bintang Indonesia. It trades about -0.09 of its total potential returns per unit of risk. Multi Bintang Indonesia is currently generating about -0.17 per unit of volatility. If you would invest 640,708 in Multi Bintang Indonesia on September 2, 2024 and sell it today you would lose (18,208) from holding Multi Bintang Indonesia or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sekar Laut Tbk vs. Multi Bintang Indonesia
Performance |
| Timeline |
| Sekar Laut Tbk |
| Multi Bintang Indonesia |
Sekar Laut and Multi Bintang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sekar Laut and Multi Bintang
The main advantage of trading using opposite Sekar Laut and Multi Bintang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sekar Laut position performs unexpectedly, Multi Bintang 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 Bintang will offset losses from the drop in Multi Bintang's long position.| Sekar Laut vs. Siantar Top Tbk | Sekar Laut vs. Prasidha Aneka Niaga | Sekar Laut vs. Mandom Indonesia Tbk | Sekar Laut vs. Pyridam Farma Tbk |
| Multi Bintang vs. Bank BRISyariah Tbk | Multi Bintang vs. Mitra Pinasthika Mustika | Multi Bintang vs. Jakarta Int Hotels | Multi Bintang vs. Indosterling Technomedia 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Directory Find actively traded commodities issued by global exchanges |