Correlation Between PT MNC and Armidian Karyatama

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

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

Diversification Opportunities for PT MNC and Armidian Karyatama

0.0

Correlation Coefficient

PT MNC  Armidian Karyatama

Pay attention - limited upside

The 3 months correlation between IATA and Armidian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT MNC Energy and Armidian Karyatama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armidian Karyatama Tbk and PT MNC 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 PT MNC Energy are associated (or correlated) with Armidian Karyatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armidian Karyatama Tbk has no effect on the direction of PT MNC i.e., PT MNC and Armidian Karyatama go up and down completely randomly.

Pair Corralation between PT MNC and Armidian Karyatama

If you would invest  3,800  in PT MNC Energy on September 2, 2024 and sell it today you would earn a total of  600.00  from holding PT MNC Energy or generate 15.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

PT MNC Energy  vs.  Armidian Karyatama Tbk

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Armidian Karyatama Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind PT MNC Energy and Armidian Karyatama 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..