Correlation Between MTN Group and PT Sarana

Can any of the company-specific risk be diversified away by investing in both MTN Group and PT Sarana 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 MTN Group and PT Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MTN Group Ltd and PT Sarana Menara, you can compare the effects of market volatilities on MTN Group and PT Sarana 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 MTN Group with a short position of PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTN Group and PT Sarana.

Diversification Opportunities for MTN Group and PT Sarana

0.27

Correlation Coefficient

MTN Group  PT Sarana

Modest diversification

The 3 months correlation between MTN and SMNUF is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding MTN Group Ltd and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara and MTN Group 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 MTN Group Ltd are associated (or correlated) with PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of MTN Group i.e., MTN Group and PT Sarana go up and down completely randomly.

Pair Corralation between MTN Group and PT Sarana

If you would invest  3.00  in PT Sarana Menara on August 31, 2024 and sell it today you would earn a total of  0.00  from holding PT Sarana Menara or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

MTN Group Ltd  vs.  PT Sarana Menara

MTN Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MTN Group Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, MTN Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PT Sarana Menara

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Sarana Menara has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PT Sarana is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MTN Group and PT Sarana

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

The idea behind MTN Group Ltd and PT Sarana Menara 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.