Correlation Between Metropolitan Land and Mega Manunggal
Can any of the company-specific risk be diversified away by investing in both Metropolitan Land and Mega Manunggal 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 Land and Mega Manunggal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan Land Tbk and Mega Manunggal Property, you can compare the effects of market volatilities on Metropolitan Land and Mega Manunggal 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 Land with a short position of Mega Manunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Land and Mega Manunggal.
Diversification Opportunities for Metropolitan Land and Mega Manunggal
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Metropolitan and Mega is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Land Tbk and Mega Manunggal Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Manunggal Property and Metropolitan Land 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 Land Tbk are associated (or correlated) with Mega Manunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Manunggal Property has no effect on the direction of Metropolitan Land i.e., Metropolitan Land and Mega Manunggal go up and down completely randomly.
Pair Corralation between Metropolitan Land and Mega Manunggal
Assuming the 90 days trading horizon Metropolitan Land Tbk is expected to generate 0.74 times more return on investment than Mega Manunggal. However, Metropolitan Land Tbk is 1.35 times less risky than Mega Manunggal. It trades about -0.22 of its potential returns per unit of risk. Mega Manunggal Property is currently generating about -0.19 per unit of risk. If you would invest 44,400 in Metropolitan Land Tbk on September 1, 2024 and sell it today you would lose (3,400) from holding Metropolitan Land Tbk or give up 7.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Metropolitan Land Tbk vs. Mega Manunggal Property
Performance |
| Timeline |
| Metropolitan Land Tbk |
| Mega Manunggal Property |
Metropolitan Land and Mega Manunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Land and Mega Manunggal
The main advantage of trading using opposite Metropolitan Land and Mega Manunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Land position performs unexpectedly, Mega Manunggal 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 Mega Manunggal will offset losses from the drop in Mega Manunggal's long position.| Metropolitan Land vs. Jaya Real Property | Metropolitan Land vs. Intiland Development Tbk | Metropolitan Land vs. Modernland Realty Ltd | Metropolitan Land vs. Lippo Cikarang Tbk |
| Mega Manunggal vs. Puradelta Lestari PT | Mega Manunggal vs. Jaya Real Property | Mega Manunggal vs. Bekasi Fajar Industrial | Mega Manunggal vs. Metropolitan Land 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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