Correlation Between MNC Vision and Jasnita Telekomindo

Can any of the company-specific risk be diversified away by investing in both MNC Vision and Jasnita Telekomindo 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 Vision and Jasnita Telekomindo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MNC Vision Networks and Jasnita Telekomindo Tbk, you can compare the effects of market volatilities on MNC Vision and Jasnita Telekomindo 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 Vision with a short position of Jasnita Telekomindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of MNC Vision and Jasnita Telekomindo.

Diversification Opportunities for MNC Vision and Jasnita Telekomindo

0.39

Correlation Coefficient

MNC Vision  Jasnita Telekomindo

Weak diversification

The 3 months correlation between MNC and Jasnita is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding MNC Vision Networks and Jasnita Telekomindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasnita Telekomindo Tbk and MNC Vision 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 Vision Networks are associated (or correlated) with Jasnita Telekomindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasnita Telekomindo Tbk has no effect on the direction of MNC Vision i.e., MNC Vision and Jasnita Telekomindo go up and down completely randomly.

Pair Corralation between MNC Vision and Jasnita Telekomindo

Assuming the 90 days trading horizon MNC Vision Networks is expected to under-perform the Jasnita Telekomindo. In addition to that, MNC Vision is 1.5 times more volatile than Jasnita Telekomindo Tbk. It trades about -0.22 of its total potential returns per unit of risk. Jasnita Telekomindo Tbk is currently generating about 0.04 per unit of volatility. If you would invest  5,700  in Jasnita Telekomindo Tbk on September 3, 2024 and sell it today you would earn a total of  200.00  from holding Jasnita Telekomindo Tbk or generate 3.51% return on investment over 90 days.

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

MNC Vision Networks  vs.  Jasnita Telekomindo Tbk

MNC Vision Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MNC Vision Networks 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.

Jasnita Telekomindo Tbk

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jasnita Telekomindo Tbk are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Jasnita Telekomindo 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 MNC Vision and Jasnita Telekomindo

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

The idea behind MNC Vision Networks and Jasnita Telekomindo 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.