Correlation Between Mandom Indonesia and Mega Manunggal
Can any of the company-specific risk be diversified away by investing in both Mandom Indonesia 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 Mandom Indonesia and Mega Manunggal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mandom Indonesia Tbk and Mega Manunggal Property, you can compare the effects of market volatilities on Mandom Indonesia 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 Mandom Indonesia with a short position of Mega Manunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mandom Indonesia and Mega Manunggal.
Diversification Opportunities for Mandom Indonesia and Mega Manunggal
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mandom and Mega is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mandom Indonesia 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 Mandom Indonesia 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 Mandom Indonesia 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 Mandom Indonesia i.e., Mandom Indonesia and Mega Manunggal go up and down completely randomly.
Pair Corralation between Mandom Indonesia and Mega Manunggal
Assuming the 90 days trading horizon Mandom Indonesia Tbk is expected to generate 0.86 times more return on investment than Mega Manunggal. However, Mandom Indonesia Tbk is 1.16 times less risky than Mega Manunggal. It trades about -0.01 of its potential returns per unit of risk. Mega Manunggal Property is currently generating about -0.17 per unit of risk. If you would invest 231,000 in Mandom Indonesia Tbk on August 31, 2024 and sell it today you would lose (2,000) from holding Mandom Indonesia Tbk or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mandom Indonesia Tbk vs. Mega Manunggal Property
Performance |
| Timeline |
| Mandom Indonesia Tbk |
| Mega Manunggal Property |
Mandom Indonesia and Mega Manunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mandom Indonesia and Mega Manunggal
The main advantage of trading using opposite Mandom Indonesia and Mega Manunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mandom Indonesia 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.| Mandom Indonesia vs. Mustika Ratu Tbk | Mandom Indonesia vs. Siantar Top Tbk | Mandom Indonesia vs. Tempo Scan Pacific | Mandom Indonesia vs. Merck Tbk |
| Mega Manunggal vs. Lippo Cikarang Tbk | Mega Manunggal vs. Lippo Karawaci Tbk | Mega Manunggal vs. Intiland Development Tbk | Mega Manunggal 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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