Correlation Between PT MNC and Indorama Synthetics
Can any of the company-specific risk be diversified away by investing in both PT MNC and Indorama Synthetics 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 PT MNC and Indorama Synthetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT MNC Energy and Indorama Synthetics Tbk, you can compare the effects of market volatilities on PT MNC and Indorama Synthetics 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 PT MNC with a short position of Indorama Synthetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT MNC and Indorama Synthetics.
Diversification Opportunities for PT MNC and Indorama Synthetics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IATA and Indorama is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PT MNC Energy and Indorama Synthetics Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indorama Synthetics Tbk and PT MNC 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 PT MNC Energy are associated (or correlated) with Indorama Synthetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indorama Synthetics Tbk has no effect on the direction of PT MNC i.e., PT MNC and Indorama Synthetics go up and down completely randomly.
Pair Corralation between PT MNC and Indorama Synthetics
Assuming the 90 days trading horizon PT MNC Energy is expected to generate 2.12 times more return on investment than Indorama Synthetics. However, PT MNC is 2.12 times more volatile than Indorama Synthetics Tbk. It trades about 0.05 of its potential returns per unit of risk. Indorama Synthetics Tbk is currently generating about -0.02 per unit of risk. If you would invest 3,700 in PT MNC Energy on September 2, 2024 and sell it today you would earn a total of 700.00 from holding PT MNC Energy or generate 18.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT MNC Energy vs. Indorama Synthetics Tbk
Performance |
| Timeline |
| PT MNC Energy |
| Indorama Synthetics Tbk |
PT MNC and Indorama Synthetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT MNC and Indorama Synthetics
The main advantage of trading using opposite PT MNC and Indorama Synthetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT MNC position performs unexpectedly, Indorama Synthetics 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 Indorama Synthetics will offset losses from the drop in Indorama Synthetics' long position.| PT MNC vs. Matahari Department Store | PT MNC vs. Multi Medika Internasional | PT MNC vs. Visi Media Asia | PT MNC vs. Bayan Resources Tbk |
| Indorama Synthetics vs. Japfa Comfeed Indonesia | Indorama Synthetics vs. Charoen Pokphand Indonesia | Indorama Synthetics vs. Erajaya Swasembada Tbk | Indorama Synthetics vs. Indofood Cbp Sukses |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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