Correlation Between Humpuss Intermoda and PT MNC

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

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

Diversification Opportunities for Humpuss Intermoda and PT MNC

-0.4

Correlation Coefficient

Humpuss Intermoda  PT MNC

Very good diversification

The 3 months correlation between Humpuss and IATA is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Humpuss Intermoda Transportasi 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 Humpuss Intermoda 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 Humpuss Intermoda Transportasi 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 Humpuss Intermoda i.e., Humpuss Intermoda and PT MNC go up and down completely randomly.

Pair Corralation between Humpuss Intermoda and PT MNC

Assuming the 90 days trading horizon Humpuss Intermoda Transportasi is expected to generate 1.53 times more return on investment than PT MNC. However, Humpuss Intermoda is 1.53 times more volatile than PT MNC Energy. It trades about 0.01 of its potential returns per unit of risk. PT MNC Energy is currently generating about -0.05 per unit of risk. If you would invest  53,000  in Humpuss Intermoda Transportasi on September 3, 2024 and sell it today you would lose (10,400) from holding Humpuss Intermoda Transportasi or give up 19.62% of portfolio value over 90 days.

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

Humpuss Intermoda Transportasi  vs.  PT MNC Energy

Humpuss Intermoda

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Humpuss Intermoda Transportasi are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Humpuss Intermoda disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT MNC Energy

Risk-Adjusted Performance

0 of 100

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 latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Humpuss Intermoda and PT MNC

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