Correlation Between Modernland Realty and Metropolitan Land
Can any of the company-specific risk be diversified away by investing in both Modernland Realty and Metropolitan 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 Metropolitan 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 Metropolitan Land Tbk, you can compare the effects of market volatilities on Modernland Realty and Metropolitan 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 Metropolitan Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modernland Realty and Metropolitan Land.
Diversification Opportunities for Modernland Realty and Metropolitan Land
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Modernland and Metropolitan is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Modernland Realty Ltd and Metropolitan Land Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan 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 Metropolitan Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Land Tbk has no effect on the direction of Modernland Realty i.e., Modernland Realty and Metropolitan Land go up and down completely randomly.
Pair Corralation between Modernland Realty and Metropolitan Land
Assuming the 90 days trading horizon Modernland Realty Ltd is expected to generate 2.39 times more return on investment than Metropolitan Land. However, Modernland Realty is 2.39 times more volatile than Metropolitan Land Tbk. It trades about -0.02 of its potential returns per unit of risk. Metropolitan Land Tbk is currently generating about -0.14 per unit of risk. If you would invest 5,400 in Modernland Realty Ltd on August 31, 2024 and sell it today you would lose (200.00) from holding Modernland Realty Ltd or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modernland Realty Ltd vs. Metropolitan Land Tbk
Performance |
| Timeline |
| Modernland Realty |
| Metropolitan Land Tbk |
Modernland Realty and Metropolitan Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modernland Realty and Metropolitan Land
The main advantage of trading using opposite Modernland Realty and Metropolitan Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modernland Realty position performs unexpectedly, Metropolitan 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 Metropolitan Land will offset losses from the drop in Metropolitan Land's long position.| Modernland Realty vs. Lippo Cikarang Tbk | Modernland Realty vs. Lippo Karawaci Tbk | Modernland Realty vs. Intiland Development Tbk | Modernland Realty vs. Mitra Pinasthika Mustika |
| Metropolitan Land vs. Lippo Cikarang Tbk | Metropolitan Land vs. Lippo Karawaci Tbk | Metropolitan Land vs. Intiland Development Tbk | Metropolitan Land vs. Mitra Pinasthika Mustika |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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