Correlation Between Mnc Investama and PT MNC

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

Diversification Opportunities for Mnc Investama and PT MNC

0.1

Correlation Coefficient

Mnc Investama  PT MNC

Average diversification

The 3 months correlation between Mnc and IATA is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Investama Tbk and PT MNC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT MNC 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 PT MNC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT MNC Energy has no effect on the direction of Mnc Investama i.e., Mnc Investama and PT MNC go up and down completely randomly.

Pair Corralation between Mnc Investama and PT MNC

Assuming the 90 days trading horizon Mnc Investama Tbk is expected to under-perform the PT MNC. In addition to that, Mnc Investama is 1.46 times more volatile than PT MNC Energy. It trades about -0.14 of its total potential returns per unit of risk. PT MNC Energy is currently generating about 0.0 per unit of volatility. If you would invest  5,000  in PT MNC Energy on December 29, 2024 and sell it today you would lose (100.00) from holding PT MNC Energy or give up 2.0% of portfolio value over 90 days.

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

Mnc Investama Tbk  vs.  PT MNC Energy

Mnc Investama Tbk

Risk-Adjusted Performance

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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

PT MNC Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT MNC Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT MNC 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 Investama and PT MNC

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

The idea behind Mnc Investama Tbk and PT MNC 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.