Correlation Between Metropolitan Kentjana and Maha Properti
Can any of the company-specific risk be diversified away by investing in both Metropolitan Kentjana and Maha Properti 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 Metropolitan Kentjana and Maha Properti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan Kentjana Tbk and Maha Properti Indonesia, you can compare the effects of market volatilities on Metropolitan Kentjana and Maha Properti 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 Metropolitan Kentjana with a short position of Maha Properti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Kentjana and Maha Properti.
Diversification Opportunities for Metropolitan Kentjana and Maha Properti
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metropolitan and Maha is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Kentjana Tbk and Maha Properti Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maha Properti Indonesia and Metropolitan Kentjana 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 Metropolitan Kentjana Tbk are associated (or correlated) with Maha Properti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maha Properti Indonesia has no effect on the direction of Metropolitan Kentjana i.e., Metropolitan Kentjana and Maha Properti go up and down completely randomly.
Pair Corralation between Metropolitan Kentjana and Maha Properti
Assuming the 90 days trading horizon Metropolitan Kentjana Tbk is expected to under-perform the Maha Properti. But the stock apears to be less risky and, when comparing its historical volatility, Metropolitan Kentjana Tbk is 4.87 times less risky than Maha Properti. The stock trades about -0.04 of its potential returns per unit of risk. The Maha Properti Indonesia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 160,500 in Maha Properti Indonesia on September 3, 2024 and sell it today you would earn a total of 40,500 from holding Maha Properti Indonesia or generate 25.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan Kentjana Tbk vs. Maha Properti Indonesia
Performance |
| Timeline |
| Metropolitan Kentjana Tbk |
| Maha Properti Indonesia |
Metropolitan Kentjana and Maha Properti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Kentjana and Maha Properti
The main advantage of trading using opposite Metropolitan Kentjana and Maha Properti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Kentjana position performs unexpectedly, Maha Properti 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 Maha Properti will offset losses from the drop in Maha Properti's long position.| Metropolitan Kentjana vs. Mitra Pinasthika Mustika | Metropolitan Kentjana vs. Jakarta Int Hotels | Metropolitan Kentjana vs. Asuransi Harta Aman | Metropolitan Kentjana vs. Indosterling Technomedia Tbk |
| Maha Properti vs. Pollux Properti Indonesia | Maha Properti vs. Jaya Sukses Makmur | Maha Properti vs. Metropolitan Kentjana Tbk | Maha Properti vs. Pollux Investasi Internasional |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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