Correlation Between Multipolar Technology and Visi Media

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

Diversification Opportunities for Multipolar Technology and Visi Media

0.76

Correlation Coefficient

Multipolar Technology  Visi Media

Poor diversification

The 3 months correlation between Multipolar and Visi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Multipolar Technology Tbk and Visi Media Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visi Media Asia 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 Visi Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visi Media Asia has no effect on the direction of Multipolar Technology i.e., Multipolar Technology and Visi Media go up and down completely randomly.

Pair Corralation between Multipolar Technology and Visi Media

Assuming the 90 days trading horizon Multipolar Technology is expected to generate 1.35 times less return on investment than Visi Media. In addition to that, Multipolar Technology is 1.12 times more volatile than Visi Media Asia. It trades about 0.18 of its total potential returns per unit of risk. Visi Media Asia is currently generating about 0.27 per unit of volatility. If you would invest  600.00  in Visi Media Asia on December 1, 2024 and sell it today you would earn a total of  700.00  from holding Visi Media Asia or generate 116.67% return on investment over 90 days.

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

Multipolar Technology Tbk  vs.  Visi Media Asia

Multipolar Technology Tbk

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Multipolar Technology Tbk are ranked lower than 14 (%) 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.

Visi Media Asia

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visi Media Asia are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Visi Media disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Multipolar Technology and Visi Media

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

The idea behind Multipolar Technology Tbk and Visi Media Asia 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.