Correlation Between Megapolitan Developments and Intiland Development
Can any of the company-specific risk be diversified away by investing in both Megapolitan Developments and Intiland Development 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 Megapolitan Developments and Intiland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Megapolitan Developments Tbk and Intiland Development Tbk, you can compare the effects of market volatilities on Megapolitan Developments and Intiland Development 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 Megapolitan Developments with a short position of Intiland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megapolitan Developments and Intiland Development.
Diversification Opportunities for Megapolitan Developments and Intiland Development
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Megapolitan and Intiland is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Megapolitan Developments Tbk and Intiland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intiland Development Tbk and Megapolitan Developments 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 Megapolitan Developments Tbk are associated (or correlated) with Intiland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intiland Development Tbk has no effect on the direction of Megapolitan Developments i.e., Megapolitan Developments and Intiland Development go up and down completely randomly.
Pair Corralation between Megapolitan Developments and Intiland Development
Assuming the 90 days trading horizon Megapolitan Developments Tbk is expected to generate 7.16 times more return on investment than Intiland Development. However, Megapolitan Developments is 7.16 times more volatile than Intiland Development Tbk. It trades about 0.0 of its potential returns per unit of risk. Intiland Development Tbk is currently generating about -0.39 per unit of risk. If you would invest 14,400 in Megapolitan Developments Tbk on August 27, 2024 and sell it today you would lose (1,600) from holding Megapolitan Developments Tbk or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Megapolitan Developments Tbk vs. Intiland Development Tbk
Performance |
| Timeline |
| Megapolitan Developments |
| Intiland Development Tbk |
Megapolitan Developments and Intiland Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megapolitan Developments and Intiland Development
The main advantage of trading using opposite Megapolitan Developments and Intiland Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megapolitan Developments position performs unexpectedly, Intiland Development 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 Intiland Development will offset losses from the drop in Intiland Development's long position.| Megapolitan Developments vs. Garuda Metalindo Tbk | Megapolitan Developments vs. Kedawung Setia Industrial | Megapolitan Developments vs. Lion Metal Works | Megapolitan Developments vs. Indonesian Tobacco Tbk |
| Intiland Development vs. Sentul City Tbk | Intiland Development vs. Modernland Realty Ltd | Intiland Development vs. Kawasan Industri Jababeka | Intiland Development vs. Ciputra Development 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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