Correlation Between Alfa Energi and MNC Vision
Can any of the company-specific risk be diversified away by investing in both Alfa Energi and MNC Vision 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 Alfa Energi and MNC Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Energi Investama and MNC Vision Networks, you can compare the effects of market volatilities on Alfa Energi and MNC Vision 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 Alfa Energi with a short position of MNC Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Energi and MNC Vision.
Diversification Opportunities for Alfa Energi and MNC Vision
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alfa and MNC is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Energi Investama and MNC Vision Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MNC Vision Networks and Alfa Energi 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 Alfa Energi Investama are associated (or correlated) with MNC Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MNC Vision Networks has no effect on the direction of Alfa Energi i.e., Alfa Energi and MNC Vision go up and down completely randomly.
Pair Corralation between Alfa Energi and MNC Vision
Assuming the 90 days trading horizon Alfa Energi Investama is expected to generate 1.64 times more return on investment than MNC Vision. However, Alfa Energi is 1.64 times more volatile than MNC Vision Networks. It trades about 0.02 of its potential returns per unit of risk. MNC Vision Networks is currently generating about -0.03 per unit of risk. If you would invest 10,300 in Alfa Energi Investama on November 28, 2024 and sell it today you would lose (2,000) from holding Alfa Energi Investama or give up 19.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Alfa Energi Investama vs. MNC Vision Networks
Performance |
Timeline |
Alfa Energi Investama |
MNC Vision Networks |
Alfa Energi and MNC Vision Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alfa Energi and MNC Vision
The main advantage of trading using opposite Alfa Energi and MNC Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Energi position performs unexpectedly, MNC Vision 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 Vision will offset losses from the drop in MNC Vision's long position.Alfa Energi vs. Borneo Olah Sarana | Alfa Energi vs. Kapuas Prima Coal | Alfa Energi vs. Central Omega Resources | Alfa Energi vs. Buana Listya Tama |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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