Correlation Between Multipolar Technology and Gaya Abadi

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

Diversification Opportunities for Multipolar Technology and Gaya Abadi

-0.71

Correlation Coefficient

Multipolar Technology  Gaya Abadi

Pay attention - limited upside

The 3 months correlation between Multipolar and Gaya is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Multipolar Technology Tbk and Gaya Abadi Sempurna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaya Abadi Sempurna 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 Gaya Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaya Abadi Sempurna has no effect on the direction of Multipolar Technology i.e., Multipolar Technology and Gaya Abadi go up and down completely randomly.

Pair Corralation between Multipolar Technology and Gaya Abadi

Assuming the 90 days trading horizon Multipolar Technology Tbk is expected to generate 9.33 times more return on investment than Gaya Abadi. However, Multipolar Technology is 9.33 times more volatile than Gaya Abadi Sempurna. It trades about 0.24 of its potential returns per unit of risk. Gaya Abadi Sempurna is currently generating about -0.4 per unit of risk. If you would invest  1,422,500  in Multipolar Technology Tbk on August 31, 2024 and sell it today you would earn a total of  850,000  from holding Multipolar Technology Tbk or generate 59.75% return on investment over 90 days.

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

Multipolar Technology Tbk  vs.  Gaya Abadi Sempurna

Multipolar Technology Tbk

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Multipolar Technology Tbk are ranked lower than 35 (%) 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.

Gaya Abadi Sempurna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaya Abadi Sempurna 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 Multipolar Technology and Gaya Abadi

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

The idea behind Multipolar Technology Tbk and Gaya Abadi Sempurna 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.