Correlation Between Mnc Land and Gihon Telekomunikasi
Can any of the company-specific risk be diversified away by investing in both Mnc Land and Gihon Telekomunikasi 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 Gihon Telekomunikasi 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 Gihon Telekomunikasi Indonesia, you can compare the effects of market volatilities on Mnc Land and Gihon Telekomunikasi 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 Gihon Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnc Land and Gihon Telekomunikasi.
Diversification Opportunities for Mnc Land and Gihon Telekomunikasi
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mnc and Gihon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Land Tbk and Gihon Telekomunikasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gihon Telekomunikasi 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 Gihon Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gihon Telekomunikasi has no effect on the direction of Mnc Land i.e., Mnc Land and Gihon Telekomunikasi go up and down completely randomly.
Pair Corralation between Mnc Land and Gihon Telekomunikasi
Assuming the 90 days trading horizon Mnc Land Tbk is expected to under-perform the Gihon Telekomunikasi. In addition to that, Mnc Land is 2.76 times more volatile than Gihon Telekomunikasi Indonesia. It trades about -0.1 of its total potential returns per unit of risk. Gihon Telekomunikasi Indonesia is currently generating about -0.05 per unit of volatility. If you would invest 172,000 in Gihon Telekomunikasi Indonesia on September 14, 2024 and sell it today you would lose (8,000) from holding Gihon Telekomunikasi Indonesia or give up 4.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mnc Land Tbk vs. Gihon Telekomunikasi Indonesia
Performance |
Timeline |
Mnc Land Tbk |
Gihon Telekomunikasi |
Mnc Land and Gihon Telekomunikasi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mnc Land and Gihon Telekomunikasi
The main advantage of trading using opposite Mnc Land and Gihon Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mnc Land position performs unexpectedly, Gihon Telekomunikasi 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 Gihon Telekomunikasi will offset losses from the drop in Gihon Telekomunikasi's long position.Mnc Land vs. Ciputra Development Tbk | Mnc Land vs. Bumi Serpong Damai | Mnc Land vs. Alam Sutera Realty | Mnc Land vs. Lippo Karawaci Tbk |
Gihon Telekomunikasi vs. Mnc Land Tbk | Gihon Telekomunikasi vs. MNC Vision Networks | Gihon Telekomunikasi vs. MD Pictures Tbk | Gihon Telekomunikasi vs. Link Net Tbk |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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