Correlation Between Elang Mahkota and MNC Studios

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

By analyzing existing cross correlation between Elang Mahkota Teknologi and MNC Studios International, you can compare the effects of market volatilities on Elang Mahkota and MNC Studios 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 Elang Mahkota with a short position of MNC Studios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and MNC Studios.

Diversification Opportunities for Elang Mahkota and MNC Studios

-0.51

Correlation Coefficient

Elang Mahkota  MNC Studios

Excellent diversification

The 3 months correlation between Elang and MNC is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and MNC Studios International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MNC Studios International and Elang Mahkota 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 Elang Mahkota Teknologi are associated (or correlated) with MNC Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MNC Studios International has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and MNC Studios go up and down completely randomly.

Pair Corralation between Elang Mahkota and MNC Studios

Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to under-perform the MNC Studios. But the stock apears to be less risky and, when comparing its historical volatility, Elang Mahkota Teknologi is 15.08 times less risky than MNC Studios. The stock trades about -0.03 of its potential returns per unit of risk. The MNC Studios International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  88,600  in MNC Studios International on October 23, 2024 and sell it today you would lose (12,100) from holding MNC Studios International or give up 13.66% of portfolio value over 90 days.

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

Elang Mahkota Teknologi  vs.  MNC Studios International

Elang Mahkota Teknologi

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Elang Mahkota Teknologi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Elang Mahkota disclosed solid returns over the last few months and may actually be approaching a breakup point.

MNC Studios International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MNC Studios International 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Elang Mahkota and MNC Studios

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

The idea behind Elang Mahkota Teknologi and MNC Studios International 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.