Correlation Between Fast Food and Mnc Kapital
Can any of the company-specific risk be diversified away by investing in both Fast Food and Mnc Kapital 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 Fast Food and Mnc Kapital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Food Indonesia and Mnc Kapital Indonesia, you can compare the effects of market volatilities on Fast Food and Mnc Kapital 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 Fast Food with a short position of Mnc Kapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Food and Mnc Kapital.
Diversification Opportunities for Fast Food and Mnc Kapital
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fast and Mnc is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fast Food Indonesia and Mnc Kapital Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Kapital Indonesia and Fast Food 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 Fast Food Indonesia are associated (or correlated) with Mnc Kapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Kapital Indonesia has no effect on the direction of Fast Food i.e., Fast Food and Mnc Kapital go up and down completely randomly.
Pair Corralation between Fast Food and Mnc Kapital
Assuming the 90 days trading horizon Fast Food Indonesia is expected to generate 0.4 times more return on investment than Mnc Kapital. However, Fast Food Indonesia is 2.48 times less risky than Mnc Kapital. It trades about 0.01 of its potential returns per unit of risk. Mnc Kapital Indonesia is currently generating about -0.13 per unit of risk. If you would invest 31,600 in Fast Food Indonesia on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Fast Food Indonesia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Food Indonesia vs. Mnc Kapital Indonesia
Performance |
| Timeline |
| Fast Food Indonesia |
| Mnc Kapital Indonesia |
Fast Food and Mnc Kapital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Food and Mnc Kapital
The main advantage of trading using opposite Fast Food and Mnc Kapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Food position performs unexpectedly, Mnc Kapital 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 Kapital will offset losses from the drop in Mnc Kapital's long position.| Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Indoritel Makmur Internasional | Fast Food vs. Enseval Putra Megatrading | Fast Food vs. Fks Multi Agro |
| Mnc Kapital vs. Visi Media Asia | Mnc Kapital vs. Tridomain Performance Materials | Mnc Kapital vs. Hero Supermarket Tbk | Mnc Kapital vs. FKS Food Sejahtera |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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