Correlation Between Victoria Insurance and Mnc Kapital
Can any of the company-specific risk be diversified away by investing in both Victoria Insurance and Mnc Kapital 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 Victoria Insurance and Mnc Kapital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victoria Insurance Tbk and Mnc Kapital Indonesia, you can compare the effects of market volatilities on Victoria Insurance and Mnc Kapital 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 Victoria Insurance with a short position of Mnc Kapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victoria Insurance and Mnc Kapital.
Diversification Opportunities for Victoria Insurance and Mnc Kapital
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Victoria and Mnc is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Victoria Insurance Tbk and Mnc Kapital Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Kapital Indonesia and Victoria Insurance 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 Victoria Insurance Tbk are associated (or correlated) with Mnc Kapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Kapital Indonesia has no effect on the direction of Victoria Insurance i.e., Victoria Insurance and Mnc Kapital go up and down completely randomly.
Pair Corralation between Victoria Insurance and Mnc Kapital
Assuming the 90 days trading horizon Victoria Insurance Tbk is expected to generate 1.85 times more return on investment than Mnc Kapital. However, Victoria Insurance is 1.85 times more volatile than Mnc Kapital Indonesia. It trades about 0.03 of its potential returns per unit of risk. Mnc Kapital Indonesia is currently generating about 0.01 per unit of risk. If you would invest 8,763 in Victoria Insurance Tbk on December 11, 2024 and sell it today you would earn a total of 1,637 from holding Victoria Insurance Tbk or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Victoria Insurance Tbk vs. Mnc Kapital Indonesia
Performance |
| Timeline |
| Victoria Insurance Tbk |
| Mnc Kapital Indonesia |
Victoria Insurance and Mnc Kapital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victoria Insurance and Mnc Kapital
The main advantage of trading using opposite Victoria Insurance and Mnc Kapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victoria Insurance position performs unexpectedly, Mnc Kapital 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 Kapital will offset losses from the drop in Mnc Kapital's long position.| Victoria Insurance vs. Victoria Investama Tbk | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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