Correlation Between Mnc Kapital and City Retail
Can any of the company-specific risk be diversified away by investing in both Mnc Kapital and City Retail 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 City Retail 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 City Retail Developments, you can compare the effects of market volatilities on Mnc Kapital and City Retail 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 City Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnc Kapital and City Retail.
Diversification Opportunities for Mnc Kapital and City Retail
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mnc and City is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Kapital Indonesia and City Retail Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Retail Developments 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 City Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Retail Developments has no effect on the direction of Mnc Kapital i.e., Mnc Kapital and City Retail go up and down completely randomly.
Pair Corralation between Mnc Kapital and City Retail
Assuming the 90 days trading horizon Mnc Kapital Indonesia is expected to generate 4.42 times more return on investment than City Retail. However, Mnc Kapital is 4.42 times more volatile than City Retail Developments. It trades about 0.0 of its potential returns per unit of risk. City Retail Developments is currently generating about -0.02 per unit of risk. If you would invest 8,000 in Mnc Kapital Indonesia on September 3, 2024 and sell it today you would lose (2,200) from holding Mnc Kapital Indonesia or give up 27.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Mnc Kapital Indonesia vs. City Retail Developments
Performance |
| Timeline |
| Mnc Kapital Indonesia |
| City Retail Developments |
Mnc Kapital and City Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mnc Kapital and City Retail
The main advantage of trading using opposite Mnc Kapital and City Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mnc Kapital position performs unexpectedly, City Retail 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 City Retail will offset losses from the drop in City Retail's long position.| Mnc Kapital vs. City Retail Developments | Mnc Kapital vs. Pacific Strategic Financial | Mnc Kapital vs. Dharma Polimetal Tbk | Mnc Kapital vs. Ace Hardware Indonesia |
| City Retail vs. Mitra Pinasthika Mustika | City Retail vs. Jakarta Int Hotels | City Retail vs. Asuransi Harta Aman | City Retail vs. Indosterling Technomedia Tbk |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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