Correlation Between Nusa Konstruksi and Mnc Land

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

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

Diversification Opportunities for Nusa Konstruksi and Mnc Land

0.35

Correlation Coefficient

Nusa Konstruksi  Mnc Land

Weak diversification

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

Pair Corralation between Nusa Konstruksi and Mnc Land

Assuming the 90 days trading horizon Nusa Konstruksi Enjiniring is expected to under-perform the Mnc Land. But the stock apears to be less risky and, when comparing its historical volatility, Nusa Konstruksi Enjiniring is 2.61 times less risky than Mnc Land. The stock trades about -0.17 of its potential returns per unit of risk. The Mnc Land Tbk is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  13,600  in Mnc Land Tbk on December 19, 2024 and sell it today you would lose (2,200) from holding Mnc Land Tbk or give up 16.18% of portfolio value over 90 days.

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

Nusa Konstruksi Enjiniring  vs.  Mnc Land Tbk

Nusa Konstruksi Enji

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nusa Konstruksi Enjiniring 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.

Mnc Land Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mnc Land Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Pair Trading with Nusa Konstruksi and Mnc Land

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

The idea behind Nusa Konstruksi Enjiniring and Mnc Land Tbk 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.