Correlation Between Modernland Realty and Multipolar Tbk

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

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

Diversification Opportunities for Modernland Realty and Multipolar Tbk

0.79

Correlation Coefficient

Modernland Realty  Multipolar Tbk

Poor diversification

The 3 months correlation between Modernland and Multipolar is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Modernland Realty Ltd and Multipolar Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multipolar Tbk and Modernland Realty 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 Modernland Realty Ltd are associated (or correlated) with Multipolar Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multipolar Tbk has no effect on the direction of Modernland Realty i.e., Modernland Realty and Multipolar Tbk go up and down completely randomly.

Pair Corralation between Modernland Realty and Multipolar Tbk

If you would invest  5,000  in Multipolar Tbk on February 16, 2024 and sell it today you would earn a total of  800.00  from holding Multipolar Tbk or generate 16.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Modernland Realty Ltd  vs.  Multipolar Tbk

Modernland Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Modernland Realty Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Multipolar Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Multipolar Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Multipolar Tbk 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 Modernland Realty and Multipolar Tbk

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

The idea behind Modernland Realty Ltd and Multipolar 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 Commodity Directory module to find actively traded commodities issued by global exchanges.