Correlation Between Indo Oil and PT MNC
Can any of the company-specific risk be diversified away by investing in both Indo Oil and PT MNC 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 Indo Oil and PT MNC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Oil Perkasa and PT MNC Energy, you can compare the effects of market volatilities on Indo Oil and PT MNC 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 Indo Oil with a short position of PT MNC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Oil and PT MNC.
Diversification Opportunities for Indo Oil and PT MNC
Very weak diversification
The 3 months correlation between Indo and IATA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Indo Oil Perkasa and PT MNC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT MNC Energy and Indo Oil 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 Indo Oil Perkasa are associated (or correlated) with PT MNC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT MNC Energy has no effect on the direction of Indo Oil i.e., Indo Oil and PT MNC go up and down completely randomly.
Pair Corralation between Indo Oil and PT MNC
Assuming the 90 days trading horizon Indo Oil Perkasa is expected to generate 0.99 times more return on investment than PT MNC. However, Indo Oil Perkasa is 1.01 times less risky than PT MNC. It trades about 0.07 of its potential returns per unit of risk. PT MNC Energy is currently generating about 0.03 per unit of risk. If you would invest 7,500 in Indo Oil Perkasa on September 1, 2024 and sell it today you would earn a total of 2,200 from holding Indo Oil Perkasa or generate 29.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Oil Perkasa vs. PT MNC Energy
Performance |
| Timeline |
| Indo Oil Perkasa |
| PT MNC Energy |
Indo Oil and PT MNC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Oil and PT MNC
The main advantage of trading using opposite Indo Oil and PT MNC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Oil position performs unexpectedly, PT MNC 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 PT MNC will offset losses from the drop in PT MNC's long position.| Indo Oil vs. Garudafood Putra Putri | Indo Oil vs. Estika Tata Tiara | Indo Oil vs. Campina Ice Cream | Indo Oil vs. PT Wahana Interfood |
| PT MNC vs. Mnc Investama Tbk | PT MNC vs. Exploitasi Energi Indonesia | PT MNC vs. Smartfren Telecom Tbk | PT MNC vs. Humpuss Intermoda Transportasi |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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