Correlation Between Mnc Kapital and Ciptadana Asset

Can any of the company-specific risk be diversified away by investing in both Mnc Kapital and Ciptadana Asset 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 Ciptadana Asset 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 Ciptadana Asset Management, you can compare the effects of market volatilities on Mnc Kapital and Ciptadana Asset 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 Ciptadana Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnc Kapital and Ciptadana Asset.

Diversification Opportunities for Mnc Kapital and Ciptadana Asset

-0.3

Correlation Coefficient

Mnc Kapital  Ciptadana Asset

Very good diversification

The 3 months correlation between Mnc and Ciptadana is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Kapital Indonesia and Ciptadana Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciptadana Asset Mana 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 Ciptadana Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciptadana Asset Mana has no effect on the direction of Mnc Kapital i.e., Mnc Kapital and Ciptadana Asset go up and down completely randomly.

Pair Corralation between Mnc Kapital and Ciptadana Asset

Assuming the 90 days trading horizon Mnc Kapital Indonesia is expected to generate 0.83 times more return on investment than Ciptadana Asset. However, Mnc Kapital Indonesia is 1.2 times less risky than Ciptadana Asset. It trades about 0.3 of its potential returns per unit of risk. Ciptadana Asset Management is currently generating about 0.04 per unit of risk. If you would invest  5,200  in Mnc Kapital Indonesia on October 20, 2024 and sell it today you would earn a total of  800.00  from holding Mnc Kapital Indonesia or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mnc Kapital Indonesia  vs.  Ciptadana Asset Management

Mnc Kapital Indonesia

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ciptadana Asset Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ciptadana Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Ciptadana Asset 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 Ciptadana Asset

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

The idea behind Mnc Kapital Indonesia and Ciptadana Asset Management 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.