Correlation Between Mega Manunggal and Jaya Real

Can any of the company-specific risk be diversified away by investing in both Mega Manunggal and Jaya Real 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 Jaya Real 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 Jaya Real Property, you can compare the effects of market volatilities on Mega Manunggal and Jaya Real 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 Jaya Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Manunggal and Jaya Real.

Diversification Opportunities for Mega Manunggal and Jaya Real

-0.43

Correlation Coefficient

Mega Manunggal  Jaya Real

Very good diversification

The 3 months correlation between Mega and Jaya is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mega Manunggal Property and Jaya Real Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Real Property 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 Jaya Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Real Property has no effect on the direction of Mega Manunggal i.e., Mega Manunggal and Jaya Real go up and down completely randomly.

Pair Corralation between Mega Manunggal and Jaya Real

Assuming the 90 days trading horizon Mega Manunggal Property is expected to generate 4.14 times more return on investment than Jaya Real. However, Mega Manunggal is 4.14 times more volatile than Jaya Real Property. It trades about 0.1 of its potential returns per unit of risk. Jaya Real Property is currently generating about 0.02 per unit of risk. If you would invest  41,400  in Mega Manunggal Property on September 10, 2024 and sell it today you would earn a total of  6,600  from holding Mega Manunggal Property or generate 15.94% return on investment over 90 days.

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

Mega Manunggal Property  vs.  Jaya Real Property

Mega Manunggal Property

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mega Manunggal Property are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Mega Manunggal disclosed solid returns over the last few months and may actually be approaching a breakup point.

Jaya Real Property

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jaya Real Property are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Jaya Real 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 Mega Manunggal and Jaya Real

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

The idea behind Mega Manunggal Property and Jaya Real Property 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.