Correlation Between Multistrada Arah and Asia Pacific

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

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

Diversification Opportunities for Multistrada Arah and Asia Pacific

0.0

Correlation Coefficient

Multistrada Arah  Asia Pacific

Pay attention - limited upside

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

Pair Corralation between Multistrada Arah and Asia Pacific

If you would invest  3,600  in Asia Pacific Investama on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Asia Pacific Investama or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Multistrada Arah Sarana  vs.  Asia Pacific Investama

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.

Asia Pacific Investama

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asia Pacific Investama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Asia Pacific 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 Multistrada Arah and Asia Pacific

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

The idea behind Multistrada Arah Sarana and Asia Pacific Investama 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.