Correlation Between Mnc Kapital and Arthavest Tbk

Can any of the company-specific risk be diversified away by investing in both Mnc Kapital and Arthavest Tbk 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 Kapital and Arthavest Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mnc Kapital Indonesia and Arthavest Tbk, you can compare the effects of market volatilities on Mnc Kapital and Arthavest Tbk 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 Kapital with a short position of Arthavest Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mnc Kapital and Arthavest Tbk.

Diversification Opportunities for Mnc Kapital and Arthavest Tbk

0.53

Correlation Coefficient

Mnc Kapital  Arthavest Tbk

Very weak diversification

The 3 months correlation between Mnc and Arthavest is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Kapital Indonesia and Arthavest Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthavest Tbk and Mnc Kapital 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 Kapital Indonesia are associated (or correlated) with Arthavest Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthavest Tbk has no effect on the direction of Mnc Kapital i.e., Mnc Kapital and Arthavest Tbk go up and down completely randomly.

Pair Corralation between Mnc Kapital and Arthavest Tbk

Assuming the 90 days trading horizon Mnc Kapital Indonesia is expected to under-perform the Arthavest Tbk. In addition to that, Mnc Kapital is 3.21 times more volatile than Arthavest Tbk. It trades about -0.16 of its total potential returns per unit of risk. Arthavest Tbk is currently generating about -0.1 per unit of volatility. If you would invest  250,000  in Arthavest Tbk on September 13, 2024 and sell it today you would lose (19,000) from holding Arthavest Tbk or give up 7.6% of portfolio value over 90 days.

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

Mnc Kapital Indonesia  vs.  Arthavest Tbk

Mnc Kapital Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mnc Kapital Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Arthavest Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arthavest Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Mnc Kapital and Arthavest Tbk

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

The idea behind Mnc Kapital Indonesia and Arthavest Tbk 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.