Correlation Between PT MNC and Rig Tenders
Can any of the company-specific risk be diversified away by investing in both PT MNC and Rig Tenders 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 Rig Tenders 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 Rig Tenders Tbk, you can compare the effects of market volatilities on PT MNC and Rig Tenders 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 Rig Tenders. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT MNC and Rig Tenders.
Diversification Opportunities for PT MNC and Rig Tenders
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IATA and Rig is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding PT MNC Energy and Rig Tenders Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rig Tenders 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 Rig Tenders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rig Tenders Tbk has no effect on the direction of PT MNC i.e., PT MNC and Rig Tenders go up and down completely randomly.
Pair Corralation between PT MNC and Rig Tenders
Assuming the 90 days trading horizon PT MNC Energy is expected to generate 1.69 times more return on investment than Rig Tenders. However, PT MNC is 1.69 times more volatile than Rig Tenders Tbk. It trades about 0.05 of its potential returns per unit of risk. Rig Tenders Tbk is currently generating about 0.07 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. Rig Tenders Tbk
Performance |
| Timeline |
| PT MNC Energy |
| Rig Tenders Tbk |
PT MNC and Rig Tenders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT MNC and Rig Tenders
The main advantage of trading using opposite PT MNC and Rig Tenders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT MNC position performs unexpectedly, Rig Tenders 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 Rig Tenders will offset losses from the drop in Rig Tenders' 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 |
| Rig Tenders vs. Matahari Department Store | Rig Tenders vs. Multi Medika Internasional | Rig Tenders vs. Visi Media Asia | Rig Tenders vs. Bayan Resources 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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