Correlation Between Mega Manunggal and Maha Properti

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

Diversification Opportunities for Mega Manunggal and Maha Properti

0.14

Correlation Coefficient

Mega Manunggal  Maha Properti

Average diversification

The 3 months correlation between Mega and Maha is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mega Manunggal Property and Maha Properti Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maha Properti Indonesia 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 Maha Properti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maha Properti Indonesia has no effect on the direction of Mega Manunggal i.e., Mega Manunggal and Maha Properti go up and down completely randomly.

Pair Corralation between Mega Manunggal and Maha Properti

Assuming the 90 days trading horizon Mega Manunggal Property is expected to generate 2.9 times more return on investment than Maha Properti. However, Mega Manunggal is 2.9 times more volatile than Maha Properti Indonesia. It trades about 0.08 of its potential returns per unit of risk. Maha Properti Indonesia is currently generating about 0.02 per unit of risk. If you would invest  50,500  in Mega Manunggal Property on December 19, 2024 and sell it today you would earn a total of  5,000  from holding Mega Manunggal Property or generate 9.9% return on investment over 90 days.

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

Mega Manunggal Property  vs.  Maha Properti Indonesia

Mega Manunggal Property

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mega Manunggal Property are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Mega Manunggal may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Maha Properti Indonesia

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Mega Manunggal Property and Maha Properti Indonesia 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.