Correlation Between Telkom Indonesia and Mnc Land
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Mnc 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 Telkom Indonesia and Mnc Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telkom Indonesia Tbk and Mnc Land Tbk, you can compare the effects of market volatilities on Telkom Indonesia and Mnc 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 Telkom Indonesia with a short position of Mnc Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Mnc Land.
Diversification Opportunities for Telkom Indonesia and Mnc Land
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telkom and Mnc is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Mnc Land Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Land Tbk and Telkom 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 Telkom Indonesia Tbk are associated (or correlated) with Mnc Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Land Tbk has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Mnc Land go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Mnc Land
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the Mnc Land. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.95 times less risky than Mnc Land. The stock trades about -0.12 of its potential returns per unit of risk. The Mnc Land Tbk is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 16,900 in Mnc Land Tbk on August 31, 2024 and sell it today you would lose (1,200) from holding Mnc Land Tbk or give up 7.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Mnc Land Tbk
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Mnc Land Tbk |
Telkom Indonesia and Mnc Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Mnc Land
The main advantage of trading using opposite Telkom Indonesia and Mnc Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Mnc 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 Mnc Land will offset losses from the drop in Mnc Land's long position.| Telkom Indonesia vs. Indosat Tbk | Telkom Indonesia vs. XL Axiata Tbk | Telkom Indonesia vs. Energi Mega Persada | Telkom Indonesia vs. Bakrie Brothers Tbk |
| Mnc Land vs. Modernland Realty Ltd | Mnc Land vs. Jaya Real Property | Mnc Land vs. Lippo Cikarang Tbk | Mnc Land vs. Jakarta Int Hotels |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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