Correlation Between Fks Multi and Maha Properti

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

By analyzing existing cross correlation between Fks Multi Agro and Maha Properti Indonesia, you can compare the effects of market volatilities on Fks Multi and Maha Properti 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 Fks Multi with a short position of Maha Properti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fks Multi and Maha Properti.

Diversification Opportunities for Fks Multi and Maha Properti

0.89

Correlation Coefficient

Fks Multi  Maha Properti

Very poor diversification

The 3 months correlation between Fks and Maha is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fks Multi Agro and Maha Properti Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maha Properti Indonesia and Fks Multi 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 Fks Multi Agro are associated (or correlated) with Maha Properti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maha Properti Indonesia has no effect on the direction of Fks Multi i.e., Fks Multi and Maha Properti go up and down completely randomly.

Pair Corralation between Fks Multi and Maha Properti

Assuming the 90 days trading horizon Fks Multi Agro is expected to generate 2.28 times more return on investment than Maha Properti. However, Fks Multi is 2.28 times more volatile than Maha Properti Indonesia. It trades about 0.17 of its potential returns per unit of risk. Maha Properti Indonesia is currently generating about 0.37 per unit of risk. If you would invest  795,000  in Fks Multi Agro on September 13, 2024 and sell it today you would earn a total of  270,000  from holding Fks Multi Agro or generate 33.96% return on investment over 90 days.

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

Fks Multi Agro  vs.  Maha Properti Indonesia

Fks Multi Agro

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fks Multi Agro are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Fks Multi disclosed solid returns over the last few months and may actually be approaching a breakup point.

Maha Properti Indonesia

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Maha Properti Indonesia are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Maha Properti disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fks Multi and Maha Properti

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

The idea behind Fks Multi Agro and Maha Properti 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.