Correlation Between Mnc Investama and Benakat Petroleum

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

By analyzing existing cross correlation between Mnc Investama Tbk and Benakat Petroleum Energy, you can compare the effects of market volatilities on Mnc Investama and Benakat Petroleum 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 Investama with a short position of Benakat Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnc Investama and Benakat Petroleum.

Diversification Opportunities for Mnc Investama and Benakat Petroleum

-0.72

Correlation Coefficient

Mnc Investama  Benakat Petroleum

Pay attention - limited upside

The 3 months correlation between Mnc and Benakat is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Investama Tbk and Benakat Petroleum Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benakat Petroleum Energy and Mnc Investama 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 Investama Tbk are associated (or correlated) with Benakat Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benakat Petroleum Energy has no effect on the direction of Mnc Investama i.e., Mnc Investama and Benakat Petroleum go up and down completely randomly.

Pair Corralation between Mnc Investama and Benakat Petroleum

Assuming the 90 days trading horizon Mnc Investama Tbk is expected to under-perform the Benakat Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, Mnc Investama Tbk is 2.6 times less risky than Benakat Petroleum. The stock trades about -0.14 of its potential returns per unit of risk. The Benakat Petroleum Energy is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  6,200  in Benakat Petroleum Energy on September 14, 2024 and sell it today you would earn a total of  3,000  from holding Benakat Petroleum Energy or generate 48.39% return on investment over 90 days.

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

Mnc Investama Tbk  vs.  Benakat Petroleum Energy

Mnc Investama Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mnc Investama Tbk 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Benakat Petroleum Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Benakat Petroleum Energy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Benakat Petroleum disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mnc Investama and Benakat Petroleum

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

The idea behind Mnc Investama Tbk and Benakat Petroleum Energy 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.