Correlation Between Mnc Land and Graha Layar

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

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

Diversification Opportunities for Mnc Land and Graha Layar

0.8

Correlation Coefficient

Mnc Land  Graha Layar

Very poor diversification

The 3 months correlation between Mnc and Graha is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Land Tbk and Graha Layar Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graha Layar Prima and Mnc Land 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 Mnc Land Tbk are associated (or correlated) with Graha Layar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graha Layar Prima has no effect on the direction of Mnc Land i.e., Mnc Land and Graha Layar go up and down completely randomly.

Pair Corralation between Mnc Land and Graha Layar

Assuming the 90 days trading horizon Mnc Land Tbk is expected to under-perform the Graha Layar. In addition to that, Mnc Land is 2.61 times more volatile than Graha Layar Prima. It trades about -0.16 of its total potential returns per unit of risk. Graha Layar Prima is currently generating about -0.13 per unit of volatility. If you would invest  200,000  in Graha Layar Prima on December 23, 2024 and sell it today you would lose (20,000) from holding Graha Layar Prima or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.31%
Values	Daily Returns

Mnc Land Tbk  vs.  Graha Layar Prima

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 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.

Graha Layar Prima

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graha Layar Prima 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 Mnc Land and Graha Layar

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

The idea behind Mnc Land Tbk and Graha Layar Prima 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.