Correlation Between Indoritel Makmur and Mnc Land
Can any of the company-specific risk be diversified away by investing in both Indoritel Makmur and Mnc Land 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 Indoritel Makmur and Mnc Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indoritel Makmur Internasional and Mnc Land Tbk, you can compare the effects of market volatilities on Indoritel Makmur and Mnc Land 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 Indoritel Makmur with a short position of Mnc Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indoritel Makmur and Mnc Land.
Diversification Opportunities for Indoritel Makmur and Mnc Land
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indoritel and Mnc is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Indoritel Makmur Internasional and Mnc Land Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Land Tbk and Indoritel Makmur 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 Indoritel Makmur Internasional are associated (or correlated) with Mnc Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Land Tbk has no effect on the direction of Indoritel Makmur i.e., Indoritel Makmur and Mnc Land go up and down completely randomly.
Pair Corralation between Indoritel Makmur and Mnc Land
Assuming the 90 days trading horizon Indoritel Makmur is expected to generate 1.03 times less return on investment than Mnc Land. But when comparing it to its historical volatility, Indoritel Makmur Internasional is 1.46 times less risky than Mnc Land. It trades about 0.09 of its potential returns per unit of risk. Mnc Land Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,700 in Mnc Land Tbk on August 29, 2024 and sell it today you would earn a total of 8,700 from holding Mnc Land Tbk or generate 112.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indoritel Makmur Internasional vs. Mnc Land Tbk
Performance |
| Timeline |
| Indoritel Makmur Int |
| Mnc Land Tbk |
Indoritel Makmur and Mnc Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indoritel Makmur and Mnc Land
The main advantage of trading using opposite Indoritel Makmur and Mnc Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indoritel Makmur position performs unexpectedly, Mnc Land 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 Mnc Land will offset losses from the drop in Mnc Land's long position.| Indoritel Makmur vs. Fast Food Indonesia | Indoritel Makmur vs. Centratama Telekomunikasi Ind | Indoritel Makmur vs. Sumber Alfaria Trijaya | Indoritel Makmur vs. Bayu Buana Tbk |
| Mnc Land vs. Modernland Realty Ltd | Mnc Land vs. Jaya Real Property | Mnc Land vs. Lippo Cikarang Tbk | Mnc Land vs. Jakarta Int Hotels |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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