Correlation Between Mega Manunggal and Agung Podomoro
Can any of the company-specific risk be diversified away by investing in both Mega Manunggal and Agung Podomoro 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 Mega Manunggal and Agung Podomoro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mega Manunggal Property and Agung Podomoro Land, you can compare the effects of market volatilities on Mega Manunggal and Agung Podomoro 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 Mega Manunggal with a short position of Agung Podomoro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Manunggal and Agung Podomoro.
Diversification Opportunities for Mega Manunggal and Agung Podomoro
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mega and Agung is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mega Manunggal Property and Agung Podomoro Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agung Podomoro Land and Mega Manunggal 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 Mega Manunggal Property are associated (or correlated) with Agung Podomoro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agung Podomoro Land has no effect on the direction of Mega Manunggal i.e., Mega Manunggal and Agung Podomoro go up and down completely randomly.
Pair Corralation between Mega Manunggal and Agung Podomoro
Assuming the 90 days trading horizon Mega Manunggal Property is expected to generate 0.79 times more return on investment than Agung Podomoro. However, Mega Manunggal Property is 1.26 times less risky than Agung Podomoro. It trades about 0.04 of its potential returns per unit of risk. Agung Podomoro Land is currently generating about -0.2 per unit of risk. If you would invest 50,000 in Mega Manunggal Property on October 24, 2024 and sell it today you would earn a total of 2,000 from holding Mega Manunggal Property or generate 4.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Mega Manunggal Property vs. Agung Podomoro Land
Performance |
Timeline |
Mega Manunggal Property |
Agung Podomoro Land |
Mega Manunggal and Agung Podomoro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mega Manunggal and Agung Podomoro
The main advantage of trading using opposite Mega Manunggal and Agung Podomoro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Manunggal position performs unexpectedly, Agung Podomoro 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 Agung Podomoro will offset losses from the drop in Agung Podomoro's long position.Mega Manunggal vs. Puradelta Lestari PT | Mega Manunggal vs. Jaya Real Property | Mega Manunggal vs. Bekasi Fajar Industrial | Mega Manunggal vs. Metropolitan Land Tbk |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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