Correlation Between Integra Indocabinet and PT Multi

Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and PT Multi 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 Integra Indocabinet and PT Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integra Indocabinet Tbk and PT Multi Garam, you can compare the effects of market volatilities on Integra Indocabinet and PT Multi 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 Integra Indocabinet with a short position of PT Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra Indocabinet and PT Multi.

Diversification Opportunities for Integra Indocabinet and PT Multi

0.0

Correlation Coefficient

Integra Indocabinet  PT Multi

Pay attention - limited upside

The 3 months correlation between Integra and FOLK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and PT Multi Garam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Multi Garam and Integra Indocabinet 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 Integra Indocabinet Tbk are associated (or correlated) with PT Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Multi Garam has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and PT Multi go up and down completely randomly.

Pair Corralation between Integra Indocabinet and PT Multi

If you would invest  31,200  in Integra Indocabinet Tbk on December 2, 2024 and sell it today you would earn a total of  3,800  from holding Integra Indocabinet Tbk or generate 12.18% return on investment over 90 days.

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

Integra Indocabinet Tbk  vs.  PT Multi Garam

Integra Indocabinet Tbk

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Indocabinet Tbk are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Integra Indocabinet disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT Multi Garam

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Multi Garam has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Multi 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 Integra Indocabinet and PT Multi

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

The idea behind Integra Indocabinet Tbk and PT Multi Garam 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.