Correlation Between Mnc Land and Kresna Graha

Can any of the company-specific risk be diversified away by investing in both Mnc Land and Kresna Graha 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 Kresna Graha 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 Kresna Graha Investama, you can compare the effects of market volatilities on Mnc Land and Kresna Graha 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 Kresna Graha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnc Land and Kresna Graha.

Diversification Opportunities for Mnc Land and Kresna Graha

0.7

Correlation Coefficient

Mnc Land  Kresna Graha

Poor diversification

The 3 months correlation between Mnc and Kresna is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Land Tbk and Kresna Graha Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kresna Graha Investama 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 Kresna Graha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kresna Graha Investama has no effect on the direction of Mnc Land i.e., Mnc Land and Kresna Graha go up and down completely randomly.

Pair Corralation between Mnc Land and Kresna Graha

Assuming the 90 days trading horizon Mnc Land Tbk is expected to generate 0.52 times more return on investment than Kresna Graha. However, Mnc Land Tbk is 1.92 times less risky than Kresna Graha. It trades about 0.08 of its potential returns per unit of risk. Kresna Graha Investama is currently generating about -0.06 per unit of risk. If you would invest  7,000  in Mnc Land Tbk on September 12, 2024 and sell it today you would earn a total of  8,200  from holding Mnc Land Tbk or generate 117.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Mnc Land Tbk  vs.  Kresna Graha Investama

Mnc Land Tbk

Risk-Adjusted Performance

0 of 100

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 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.

Kresna Graha Investama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kresna Graha Investama 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.

Pair Trading with Mnc Land and Kresna Graha

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

The idea behind Mnc Land Tbk and Kresna Graha Investama 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.