Correlation Between Mnc Kapital and Pacific Strategic

Can any of the company-specific risk be diversified away by investing in both Mnc Kapital and Pacific Strategic 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 Mnc Kapital and Pacific Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mnc Kapital Indonesia and Pacific Strategic Financial, you can compare the effects of market volatilities on Mnc Kapital and Pacific Strategic 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 Mnc Kapital with a short position of Pacific Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnc Kapital and Pacific Strategic.

Diversification Opportunities for Mnc Kapital and Pacific Strategic

0.35

Correlation Coefficient

Mnc Kapital  Pacific Strategic

Weak diversification

The 3 months correlation between Mnc and Pacific is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Kapital Indonesia and Pacific Strategic Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Strategic and Mnc Kapital 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 Mnc Kapital Indonesia are associated (or correlated) with Pacific Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Strategic has no effect on the direction of Mnc Kapital i.e., Mnc Kapital and Pacific Strategic go up and down completely randomly.

Pair Corralation between Mnc Kapital and Pacific Strategic

Assuming the 90 days trading horizon Mnc Kapital Indonesia is expected to under-perform the Pacific Strategic. In addition to that, Mnc Kapital is 1.32 times more volatile than Pacific Strategic Financial. It trades about -0.07 of its total potential returns per unit of risk. Pacific Strategic Financial is currently generating about -0.05 per unit of volatility. If you would invest  109,500  in Pacific Strategic Financial on December 30, 2024 and sell it today you would lose (6,000) from holding Pacific Strategic Financial or give up 5.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mnc Kapital Indonesia  vs.  Pacific Strategic Financial

Mnc Kapital Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mnc Kapital Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pacific Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pacific Strategic Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Pacific Strategic is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Mnc Kapital and Pacific Strategic

The main advantage of trading using opposite Mnc Kapital and Pacific Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mnc Kapital position performs unexpectedly, Pacific Strategic 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 Pacific Strategic will offset losses from the drop in Pacific Strategic's long position.

The idea behind Mnc Kapital Indonesia and Pacific Strategic Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.