Correlation Between Mandom Indonesia and Multi Indocitra
Can any of the company-specific risk be diversified away by investing in both Mandom Indonesia 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 Mandom Indonesia and Multi Indocitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mandom Indonesia Tbk and Multi Indocitra Tbk, you can compare the effects of market volatilities on Mandom Indonesia 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 Mandom Indonesia with a short position of Multi Indocitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mandom Indonesia and Multi Indocitra.
Diversification Opportunities for Mandom Indonesia and Multi Indocitra
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mandom and Multi is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mandom Indonesia 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 Mandom Indonesia 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 Mandom Indonesia 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 Mandom Indonesia i.e., Mandom Indonesia and Multi Indocitra go up and down completely randomly.
Pair Corralation between Mandom Indonesia and Multi Indocitra
Assuming the 90 days trading horizon Mandom Indonesia Tbk is expected to under-perform the Multi Indocitra. In addition to that, Mandom Indonesia is 1.27 times more volatile than Multi Indocitra Tbk. It trades about -0.08 of its total potential returns per unit of risk. Multi Indocitra Tbk is currently generating about -0.01 per unit of volatility. If you would invest 53,000 in Multi Indocitra Tbk on September 3, 2024 and sell it today you would lose (1,000.00) from holding Multi Indocitra Tbk or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mandom Indonesia Tbk vs. Multi Indocitra Tbk
Performance |
| Timeline |
| Mandom Indonesia Tbk |
| Multi Indocitra Tbk |
Mandom Indonesia and Multi Indocitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mandom Indonesia and Multi Indocitra
The main advantage of trading using opposite Mandom Indonesia and Multi Indocitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mandom Indonesia 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.| Mandom Indonesia vs. Astra International Tbk | Mandom Indonesia vs. Unilever Indonesia Tbk | Mandom Indonesia vs. Telkom Indonesia Tbk | Mandom Indonesia vs. Bank Mandiri Persero |
| Multi Indocitra vs. Mitra Pinasthika Mustika | Multi Indocitra vs. Jakarta Int Hotels | Multi Indocitra vs. Asuransi Harta Aman | Multi Indocitra 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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