Correlation Between Modernland Realty and Mnc Land
Can any of the company-specific risk be diversified away by investing in both Modernland Realty and Mnc Land 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 Modernland Realty and Mnc Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modernland Realty Ltd and Mnc Land Tbk, you can compare the effects of market volatilities on Modernland Realty and Mnc Land 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 Modernland Realty with a short position of Mnc Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modernland Realty and Mnc Land.
Diversification Opportunities for Modernland Realty and Mnc Land
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Modernland and Mnc is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Modernland Realty Ltd and Mnc Land Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Land Tbk and Modernland Realty 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 Modernland Realty Ltd are associated (or correlated) with Mnc Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Land Tbk has no effect on the direction of Modernland Realty i.e., Modernland Realty and Mnc Land go up and down completely randomly.
Pair Corralation between Modernland Realty and Mnc Land
Assuming the 90 days trading horizon Modernland Realty Ltd is expected to under-perform the Mnc Land. But the stock apears to be less risky and, when comparing its historical volatility, Modernland Realty Ltd is 1.64 times less risky than Mnc Land. The stock trades about -0.03 of its potential returns per unit of risk. The Mnc Land Tbk is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,800 in Mnc Land Tbk on August 27, 2024 and sell it today you would earn a total of 9,000 from holding Mnc Land Tbk or generate 132.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modernland Realty Ltd vs. Mnc Land Tbk
Performance |
| Timeline |
| Modernland Realty |
| Mnc Land Tbk |
Modernland Realty and Mnc Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modernland Realty and Mnc Land
The main advantage of trading using opposite Modernland Realty and Mnc Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modernland Realty position performs unexpectedly, Mnc Land 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 Land will offset losses from the drop in Mnc Land's long position.| Modernland Realty vs. Kawasan Industri Jababeka | Modernland Realty vs. Lippo Cikarang Tbk | Modernland Realty vs. Sentul City Tbk | Modernland Realty vs. Lippo Karawaci Tbk |
| Mnc Land vs. Modernland Realty Ltd | Mnc Land vs. Jaya Real Property | Mnc Land vs. Lippo Cikarang Tbk | Mnc Land vs. Jakarta Int Hotels |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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