Correlation Between Mitra Pinasthika and Multipolar Technology

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

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

Diversification Opportunities for Mitra Pinasthika and Multipolar Technology

-0.82

Correlation Coefficient

Mitra Pinasthika  Multipolar Technology

Pay attention - limited upside

The 3 months correlation between Mitra and Multipolar is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Multipolar Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multipolar Technology Tbk and Mitra Pinasthika 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 Mitra Pinasthika Mustika are associated (or correlated) with Multipolar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multipolar Technology Tbk has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Multipolar Technology go up and down completely randomly.

Pair Corralation between Mitra Pinasthika and Multipolar Technology

Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to under-perform the Multipolar Technology. But the stock apears to be less risky and, when comparing its historical volatility, Mitra Pinasthika Mustika is 19.3 times less risky than Multipolar Technology. The stock trades about -0.13 of its potential returns per unit of risk. The Multipolar Technology Tbk is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest  170,000  in Multipolar Technology Tbk on September 2, 2024 and sell it today you would earn a total of  1,970,000  from holding Multipolar Technology Tbk or generate 1158.82% return on investment over 90 days.

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

Mitra Pinasthika Mustika  vs.  Multipolar Technology Tbk

Mitra Pinasthika Mustika

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitra Pinasthika Mustika has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Mitra Pinasthika is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Mitra Pinasthika and Multipolar Technology

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

The idea behind Mitra Pinasthika Mustika and Multipolar Technology Tbk 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.