Correlation Between Mnc Kapital and Asuransi Bintang
Can any of the company-specific risk be diversified away by investing in both Mnc Kapital and Asuransi Bintang 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 Mnc Kapital and Asuransi Bintang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mnc Kapital Indonesia and Asuransi Bintang Tbk, you can compare the effects of market volatilities on Mnc Kapital and Asuransi Bintang 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 Mnc Kapital with a short position of Asuransi Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnc Kapital and Asuransi Bintang.
Diversification Opportunities for Mnc Kapital and Asuransi Bintang
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mnc and Asuransi is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Kapital Indonesia and Asuransi Bintang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Bintang Tbk and Mnc Kapital 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 Mnc Kapital Indonesia are associated (or correlated) with Asuransi Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Bintang Tbk has no effect on the direction of Mnc Kapital i.e., Mnc Kapital and Asuransi Bintang go up and down completely randomly.
Pair Corralation between Mnc Kapital and Asuransi Bintang
Assuming the 90 days trading horizon Mnc Kapital Indonesia is expected to generate 0.71 times more return on investment than Asuransi Bintang. However, Mnc Kapital Indonesia is 1.41 times less risky than Asuransi Bintang. It trades about -0.12 of its potential returns per unit of risk. Asuransi Bintang Tbk is currently generating about -0.32 per unit of risk. If you would invest 6,900 in Mnc Kapital Indonesia on August 29, 2024 and sell it today you would lose (1,000.00) from holding Mnc Kapital Indonesia or give up 14.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mnc Kapital Indonesia vs. Asuransi Bintang Tbk
Performance |
| Timeline |
| Mnc Kapital Indonesia |
| Asuransi Bintang Tbk |
Mnc Kapital and Asuransi Bintang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mnc Kapital and Asuransi Bintang
The main advantage of trading using opposite Mnc Kapital and Asuransi Bintang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mnc Kapital position performs unexpectedly, Asuransi Bintang 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 Asuransi Bintang will offset losses from the drop in Asuransi Bintang's long position.| Mnc Kapital vs. Diamond Food Indonesia | Mnc Kapital vs. Cisarua Mountain Dairy | Mnc Kapital vs. Tera Data Indonusa | Mnc Kapital vs. Indofood Cbp Sukses |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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