Correlation Between Multipolar Technology and Nusantara Voucher

Can any of the company-specific risk be diversified away by investing in both Multipolar Technology and Nusantara Voucher 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 Multipolar Technology and Nusantara Voucher into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Multipolar Technology Tbk and Nusantara Voucher Distribution, you can compare the effects of market volatilities on Multipolar Technology and Nusantara Voucher 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 Multipolar Technology with a short position of Nusantara Voucher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multipolar Technology and Nusantara Voucher.

Diversification Opportunities for Multipolar Technology and Nusantara Voucher

0.47

Correlation Coefficient

Multipolar Technology  Nusantara Voucher

Very weak diversification

The 3 months correlation between Multipolar and Nusantara is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Multipolar Technology Tbk and Nusantara Voucher Distribution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusantara Voucher and Multipolar Technology 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 Multipolar Technology Tbk are associated (or correlated) with Nusantara Voucher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusantara Voucher has no effect on the direction of Multipolar Technology i.e., Multipolar Technology and Nusantara Voucher go up and down completely randomly.

Pair Corralation between Multipolar Technology and Nusantara Voucher

Assuming the 90 days trading horizon Multipolar Technology Tbk is expected to generate 1.07 times more return on investment than Nusantara Voucher. However, Multipolar Technology is 1.07 times more volatile than Nusantara Voucher Distribution. It trades about 0.33 of its potential returns per unit of risk. Nusantara Voucher Distribution is currently generating about 0.09 per unit of risk. If you would invest  115,313  in Multipolar Technology Tbk on September 1, 2024 and sell it today you would earn a total of  2,024,687  from holding Multipolar Technology Tbk or generate 1755.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.21%
Values	Daily Returns

Multipolar Technology Tbk  vs.  Nusantara Voucher Distribution

Multipolar Technology Tbk

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Multipolar Technology Tbk are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Multipolar Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Nusantara Voucher

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nusantara Voucher Distribution are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Nusantara Voucher disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Multipolar Technology and Nusantara Voucher

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

The idea behind Multipolar Technology Tbk and Nusantara Voucher Distribution 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.