Correlation Between Mnc Land and Nusantara Infrastructure

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

Diversification Opportunities for Mnc Land and Nusantara Infrastructure

0.0

Correlation Coefficient

Mnc Land  Nusantara Infrastructure

Pay attention - limited upside

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

Pair Corralation between Mnc Land and Nusantara Infrastructure

Assuming the 90 days trading horizon Mnc Land is expected to generate 1.08 times less return on investment than Nusantara Infrastructure. In addition to that, Mnc Land is 1.08 times more volatile than Nusantara Infrastructure Tbk. It trades about 0.05 of its total potential returns per unit of risk. Nusantara Infrastructure Tbk is currently generating about 0.06 per unit of volatility. If you would invest  11,800  in Nusantara Infrastructure Tbk on December 2, 2024 and sell it today you would earn a total of  12,000  from holding Nusantara Infrastructure Tbk or generate 101.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.57%
Values	Daily Returns

Mnc Land Tbk  vs.  Nusantara Infrastructure Tbk

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.

Nusantara Infrastructure

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Mnc Land Tbk and Nusantara Infrastructure 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.