Correlation Between Uni Charm and MNC Studios
Can any of the company-specific risk be diversified away by investing in both Uni Charm and MNC Studios 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 Uni Charm and MNC Studios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uni Charm Indonesia and MNC Studios International, you can compare the effects of market volatilities on Uni Charm and MNC Studios 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 Uni Charm with a short position of MNC Studios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uni Charm and MNC Studios.
Diversification Opportunities for Uni Charm and MNC Studios
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Uni and MNC is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Uni Charm Indonesia and MNC Studios International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MNC Studios International and Uni Charm 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 Uni Charm Indonesia are associated (or correlated) with MNC Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MNC Studios International has no effect on the direction of Uni Charm i.e., Uni Charm and MNC Studios go up and down completely randomly.
Pair Corralation between Uni Charm and MNC Studios
Assuming the 90 days trading horizon Uni Charm Indonesia is expected to generate 0.56 times more return on investment than MNC Studios. However, Uni Charm Indonesia is 1.79 times less risky than MNC Studios. It trades about -0.37 of its potential returns per unit of risk. MNC Studios International is currently generating about -0.28 per unit of risk. If you would invest 96,000 in Uni Charm Indonesia on September 1, 2024 and sell it today you would lose (18,000) from holding Uni Charm Indonesia or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Uni Charm Indonesia vs. MNC Studios International
Performance |
| Timeline |
| Uni Charm Indonesia |
| MNC Studios International |
Uni Charm and MNC Studios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uni Charm and MNC Studios
The main advantage of trading using opposite Uni Charm and MNC Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uni Charm position performs unexpectedly, MNC Studios 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 Studios will offset losses from the drop in MNC Studios' long position.| Uni Charm vs. Kino Indonesia Tbk | Uni Charm vs. Garudafood Putra Putri | Uni Charm vs. Mulia Boga Raya | Uni Charm vs. Ultra Jaya Milk |
| MNC Studios vs. Mnc Land Tbk | MNC Studios vs. MNC Vision Networks | MNC Studios vs. MD Pictures Tbk | MNC Studios vs. Link Net 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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