Correlation Between Mnc Investama and Indosat Tbk
Can any of the company-specific risk be diversified away by investing in both Mnc Investama and Indosat 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 Mnc Investama and Indosat Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mnc Investama Tbk and Indosat Tbk, you can compare the effects of market volatilities on Mnc Investama and Indosat 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 Mnc Investama with a short position of Indosat Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnc Investama and Indosat Tbk.
Diversification Opportunities for Mnc Investama and Indosat Tbk
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mnc and Indosat is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Investama Tbk and Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosat Tbk and Mnc Investama 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 Investama Tbk are associated (or correlated) with Indosat Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosat Tbk has no effect on the direction of Mnc Investama i.e., Mnc Investama and Indosat Tbk go up and down completely randomly.
Pair Corralation between Mnc Investama and Indosat Tbk
Assuming the 90 days trading horizon Mnc Investama Tbk is expected to generate 0.99 times more return on investment than Indosat Tbk. However, Mnc Investama Tbk is 1.01 times less risky than Indosat Tbk. It trades about -0.16 of its potential returns per unit of risk. Indosat Tbk is currently generating about -0.31 per unit of risk. If you would invest 3,400 in Mnc Investama Tbk on November 30, 2024 and sell it today you would lose (800.00) from holding Mnc Investama Tbk or give up 23.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mnc Investama Tbk vs. Indosat Tbk
Performance |
| Timeline |
| Mnc Investama Tbk |
| Indosat Tbk |
Mnc Investama and Indosat Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mnc Investama and Indosat Tbk
The main advantage of trading using opposite Mnc Investama and Indosat Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mnc Investama position performs unexpectedly, Indosat 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 Indosat Tbk will offset losses from the drop in Indosat Tbk's long position.| Mnc Investama vs. Global Mediacom Tbk | Mnc Investama vs. Sentul City Tbk | Mnc Investama vs. Kawasan Industri Jababeka | Mnc Investama vs. Energi Mega Persada |
| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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