Correlation Between Asuransi Multi and Adira Dinamika

Can any of the company-specific risk be diversified away by investing in both Asuransi Multi and Adira Dinamika 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 Asuransi Multi and Adira Dinamika into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asuransi Multi Artha and Adira Dinamika Multi, you can compare the effects of market volatilities on Asuransi Multi and Adira Dinamika 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 Asuransi Multi with a short position of Adira Dinamika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Multi and Adira Dinamika.

Diversification Opportunities for Asuransi Multi and Adira Dinamika

0.56

Correlation Coefficient

Asuransi Multi  Adira Dinamika

Very weak diversification

The 3 months correlation between Asuransi and Adira is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Multi Artha and Adira Dinamika Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adira Dinamika Multi and Asuransi Multi 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 Asuransi Multi Artha are associated (or correlated) with Adira Dinamika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adira Dinamika Multi has no effect on the direction of Asuransi Multi i.e., Asuransi Multi and Adira Dinamika go up and down completely randomly.

Pair Corralation between Asuransi Multi and Adira Dinamika

Assuming the 90 days trading horizon Asuransi Multi Artha is expected to under-perform the Adira Dinamika. In addition to that, Asuransi Multi is 1.73 times more volatile than Adira Dinamika Multi. It trades about -0.13 of its total potential returns per unit of risk. Adira Dinamika Multi is currently generating about -0.17 per unit of volatility. If you would invest  1,107,500  in Adira Dinamika Multi on September 5, 2024 and sell it today you would lose (97,500) from holding Adira Dinamika Multi or give up 8.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Asuransi Multi Artha  vs.  Adira Dinamika Multi

Asuransi Multi Artha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Multi Artha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Adira Dinamika Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adira Dinamika Multi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Asuransi Multi and Adira Dinamika

The main advantage of trading using opposite Asuransi Multi and Adira Dinamika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asuransi Multi position performs unexpectedly, Adira Dinamika 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 Adira Dinamika will offset losses from the drop in Adira Dinamika's long position.

The idea behind Asuransi Multi Artha and Adira Dinamika Multi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.