Correlation Between Mnc Land and Lenox Pasifik

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

Diversification Opportunities for Mnc Land and Lenox Pasifik

-0.15

Correlation Coefficient

Mnc Land  Lenox Pasifik

Good diversification

The 3 months correlation between Mnc and Lenox is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Land Tbk and Lenox Pasifik Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenox Pasifik 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 Lenox Pasifik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenox Pasifik Investama has no effect on the direction of Mnc Land i.e., Mnc Land and Lenox Pasifik go up and down completely randomly.

Pair Corralation between Mnc Land and Lenox Pasifik

Assuming the 90 days trading horizon Mnc Land Tbk is expected to generate 1.12 times more return on investment than Lenox Pasifik. However, Mnc Land is 1.12 times more volatile than Lenox Pasifik Investama. It trades about -0.02 of its potential returns per unit of risk. Lenox Pasifik Investama is currently generating about -0.42 per unit of risk. If you would invest  15,800  in Mnc Land Tbk on September 4, 2024 and sell it today you would lose (600.00) from holding Mnc Land Tbk or give up 3.8% of portfolio value over 90 days.

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

Mnc Land Tbk  vs.  Lenox Pasifik 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 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.

Lenox Pasifik Investama

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lenox Pasifik Investama are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Lenox Pasifik 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 Mnc Land and Lenox Pasifik

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

The idea behind Mnc Land Tbk and Lenox Pasifik 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.