Correlation Between Smartfren Telecom and Mnc Investama
Can any of the company-specific risk be diversified away by investing in both Smartfren Telecom and Mnc Investama 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 Smartfren Telecom and Mnc Investama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smartfren Telecom Tbk and Mnc Investama Tbk, you can compare the effects of market volatilities on Smartfren Telecom and Mnc Investama 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 Smartfren Telecom with a short position of Mnc Investama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartfren Telecom and Mnc Investama.
Diversification Opportunities for Smartfren Telecom and Mnc Investama
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Smartfren and Mnc is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Smartfren Telecom Tbk and Mnc Investama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Investama Tbk and Smartfren Telecom 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 Smartfren Telecom Tbk are associated (or correlated) with Mnc Investama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Investama Tbk has no effect on the direction of Smartfren Telecom i.e., Smartfren Telecom and Mnc Investama go up and down completely randomly.
Pair Corralation between Smartfren Telecom and Mnc Investama
Assuming the 90 days trading horizon Smartfren Telecom Tbk is expected to generate 1.39 times more return on investment than Mnc Investama. However, Smartfren Telecom is 1.39 times more volatile than Mnc Investama Tbk. It trades about -0.11 of its potential returns per unit of risk. Mnc Investama Tbk is currently generating about -0.2 per unit of risk. If you would invest 2,800 in Smartfren Telecom Tbk on October 25, 2024 and sell it today you would lose (500.00) from holding Smartfren Telecom Tbk or give up 17.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smartfren Telecom Tbk vs. Mnc Investama Tbk
Performance |
| Timeline |
| Smartfren Telecom Tbk |
| Mnc Investama Tbk |
Smartfren Telecom and Mnc Investama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartfren Telecom and Mnc Investama
The main advantage of trading using opposite Smartfren Telecom and Mnc Investama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartfren Telecom position performs unexpectedly, Mnc Investama 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 Investama will offset losses from the drop in Mnc Investama's long position.| Smartfren Telecom vs. Media Nusantara Citra | Smartfren Telecom vs. Matahari Department Store | Smartfren Telecom vs. Akr Corporindo Tbk | Smartfren Telecom vs. XL Axiata Tbk |
| Mnc Investama vs. Global Mediacom Tbk | Mnc Investama vs. Sentul City Tbk | Mnc Investama vs. Kawasan Industri Jababeka | Mnc Investama vs. Energi Mega Persada |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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