Correlation Between PT Indonesia and Multistrada Arah

Can any of the company-specific risk be diversified away by investing in both PT Indonesia and Multistrada Arah 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 PT Indonesia and Multistrada Arah into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Indonesia Kendaraan and Multistrada Arah Sarana, you can compare the effects of market volatilities on PT Indonesia and Multistrada Arah 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 PT Indonesia with a short position of Multistrada Arah. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indonesia and Multistrada Arah.

Diversification Opportunities for PT Indonesia and Multistrada Arah

0.0

Correlation Coefficient

PT Indonesia  Multistrada Arah

Pay attention - limited upside

The 3 months correlation between IPCC and Multistrada is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Indonesia Kendaraan and Multistrada Arah Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multistrada Arah Sarana and PT 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 PT Indonesia Kendaraan are associated (or correlated) with Multistrada Arah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multistrada Arah Sarana has no effect on the direction of PT Indonesia i.e., PT Indonesia and Multistrada Arah go up and down completely randomly.

Pair Corralation between PT Indonesia and Multistrada Arah

If you would invest  71,507  in PT Indonesia Kendaraan on December 2, 2024 and sell it today you would lose (7.00) from holding PT Indonesia Kendaraan or give up 0.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

PT Indonesia Kendaraan  vs.  Multistrada Arah Sarana

PT Indonesia Kendaraan

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Indonesia Kendaraan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Indonesia is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Multistrada Arah Sarana

Risk-Adjusted Performance

Very Weak

Over the last 90 days Multistrada Arah Sarana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Multistrada Arah is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with PT Indonesia and Multistrada Arah

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

The idea behind PT Indonesia Kendaraan and Multistrada Arah Sarana 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.