Correlation Between Bhuwanatala Indah and PT MNC

Can any of the company-specific risk be diversified away by investing in both Bhuwanatala Indah 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 Bhuwanatala Indah and PT MNC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bhuwanatala Indah Permai and PT MNC Energy, you can compare the effects of market volatilities on Bhuwanatala Indah 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 Bhuwanatala Indah with a short position of PT MNC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bhuwanatala Indah and PT MNC.

Diversification Opportunities for Bhuwanatala Indah and PT MNC

-0.09

Correlation Coefficient

Bhuwanatala Indah  PT MNC

Good diversification

The 3 months correlation between Bhuwanatala and IATA is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bhuwanatala Indah Permai 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 Bhuwanatala Indah 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 Bhuwanatala Indah Permai 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 Bhuwanatala Indah i.e., Bhuwanatala Indah and PT MNC go up and down completely randomly.

Pair Corralation between Bhuwanatala Indah and PT MNC

Assuming the 90 days trading horizon Bhuwanatala Indah is expected to generate 2.05 times less return on investment than PT MNC. In addition to that, Bhuwanatala Indah is 1.32 times more volatile than PT MNC Energy. It trades about 0.02 of its total potential returns per unit of risk. PT MNC Energy is currently generating about 0.06 per unit of volatility. If you would invest  4,700  in PT MNC Energy on December 1, 2024 and sell it today you would earn a total of  400.00  from holding PT MNC Energy or generate 8.51% return on investment over 90 days.

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

Bhuwanatala Indah Permai  vs.  PT MNC Energy

Bhuwanatala Indah Permai

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bhuwanatala Indah Permai are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Bhuwanatala Indah is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PT MNC Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT MNC Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT MNC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bhuwanatala Indah and PT MNC

The main advantage of trading using opposite Bhuwanatala Indah and PT MNC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bhuwanatala Indah 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 Bhuwanatala Indah Permai 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.