Correlation Between Multipolar Technology and Kioson Komersial

Can any of the company-specific risk be diversified away by investing in both Multipolar Technology and Kioson Komersial 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 Kioson Komersial 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 Kioson Komersial Indonesia, you can compare the effects of market volatilities on Multipolar Technology and Kioson Komersial 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 Kioson Komersial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multipolar Technology and Kioson Komersial.

Diversification Opportunities for Multipolar Technology and Kioson Komersial

-0.13

Correlation Coefficient

Multipolar Technology  Kioson Komersial

Good diversification

The 3 months correlation between Multipolar and Kioson is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Multipolar Technology Tbk and Kioson Komersial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kioson Komersial Ind 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 Kioson Komersial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kioson Komersial Ind has no effect on the direction of Multipolar Technology i.e., Multipolar Technology and Kioson Komersial go up and down completely randomly.

Pair Corralation between Multipolar Technology and Kioson Komersial

Assuming the 90 days trading horizon Multipolar Technology Tbk is expected to generate 29.29 times more return on investment than Kioson Komersial. However, Multipolar Technology is 29.29 times more volatile than Kioson Komersial Indonesia. It trades about 0.18 of its potential returns per unit of risk. Kioson Komersial Indonesia is currently generating about -0.22 per unit of risk. If you would invest  1,540,000  in Multipolar Technology Tbk on September 1, 2024 and sell it today you would earn a total of  600,000  from holding Multipolar Technology Tbk or generate 38.96% return on investment over 90 days.

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

Multipolar Technology Tbk  vs.  Kioson Komersial Indonesia

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.

Kioson Komersial Ind

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kioson Komersial Indonesia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Kioson Komersial 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 Multipolar Technology and Kioson Komersial

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

The idea behind Multipolar Technology Tbk and Kioson Komersial Indonesia 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.