Correlation Between Mnc Land and Surya Permata

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

Diversification Opportunities for Mnc Land and Surya Permata

-0.67

Correlation Coefficient

Mnc Land  Surya Permata

Excellent diversification

The 3 months correlation between Mnc and Surya is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Land Tbk and Surya Permata Andalan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Permata Andalan 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 Surya Permata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Permata Andalan has no effect on the direction of Mnc Land i.e., Mnc Land and Surya Permata go up and down completely randomly.

Pair Corralation between Mnc Land and Surya Permata

Assuming the 90 days trading horizon Mnc Land Tbk is expected to under-perform the Surya Permata. In addition to that, Mnc Land is 1.35 times more volatile than Surya Permata Andalan. It trades about -0.04 of its total potential returns per unit of risk. Surya Permata Andalan is currently generating about 0.07 per unit of volatility. If you would invest  14,500  in Surya Permata Andalan on November 29, 2024 and sell it today you would earn a total of  1,300  from holding Surya Permata Andalan or generate 8.97% return on investment over 90 days.

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

Mnc Land Tbk  vs.  Surya Permata Andalan

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 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.

Surya Permata Andalan

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Surya Permata Andalan are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Surya Permata may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Mnc Land and Surya Permata

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

The idea behind Mnc Land Tbk and Surya Permata Andalan 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.