Correlation Between Mnc Land and Pudjiadi Prestige
Can any of the company-specific risk be diversified away by investing in both Mnc Land and Pudjiadi Prestige 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 Pudjiadi Prestige 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 Pudjiadi Prestige Tbk, you can compare the effects of market volatilities on Mnc Land and Pudjiadi Prestige 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 Pudjiadi Prestige. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnc Land and Pudjiadi Prestige.
Diversification Opportunities for Mnc Land and Pudjiadi Prestige
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mnc and Pudjiadi is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Land Tbk and Pudjiadi Prestige Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pudjiadi Prestige Tbk 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 Pudjiadi Prestige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pudjiadi Prestige Tbk has no effect on the direction of Mnc Land i.e., Mnc Land and Pudjiadi Prestige go up and down completely randomly.
Pair Corralation between Mnc Land and Pudjiadi Prestige
Assuming the 90 days trading horizon Mnc Land Tbk is expected to generate 1.18 times more return on investment than Pudjiadi Prestige. However, Mnc Land is 1.18 times more volatile than Pudjiadi Prestige Tbk. It trades about -0.09 of its potential returns per unit of risk. Pudjiadi Prestige Tbk is currently generating about -0.2 per unit of risk. If you would invest 15,200 in Mnc Land Tbk on December 1, 2024 and sell it today you would lose (3,300) from holding Mnc Land Tbk or give up 21.71% 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. Pudjiadi Prestige Tbk
Performance |
Timeline |
Mnc Land Tbk |
Pudjiadi Prestige Tbk |
Mnc Land and Pudjiadi Prestige Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mnc Land and Pudjiadi Prestige
The main advantage of trading using opposite Mnc Land and Pudjiadi Prestige positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mnc Land position performs unexpectedly, Pudjiadi Prestige 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 Pudjiadi Prestige will offset losses from the drop in Pudjiadi Prestige's long position.Mnc Land vs. Modernland Realty Ltd | Mnc Land vs. Jaya Real Property | Mnc Land vs. Lippo Cikarang Tbk | Mnc Land vs. Jakarta Int Hotels |
Pudjiadi Prestige vs. Ristia Bintang Mahkotasejati | Pudjiadi Prestige vs. Suryamas Dutamakmur Tbk | Pudjiadi Prestige vs. Pikko Land Development | Pudjiadi Prestige vs. Hotel Sahid Jaya |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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