Correlation Between MNC Studios and Elang Mahkota

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

By analyzing existing cross correlation between MNC Studios International and Elang Mahkota Teknologi, you can compare the effects of market volatilities on MNC Studios and Elang Mahkota 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 Studios with a short position of Elang Mahkota. Check out your portfolio center. Please also check ongoing floating volatility patterns of MNC Studios and Elang Mahkota.

Diversification Opportunities for MNC Studios and Elang Mahkota

-0.7

Correlation Coefficient

MNC Studios  Elang Mahkota

Excellent diversification

The 3 months correlation between MNC and Elang is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding MNC Studios International and Elang Mahkota Teknologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elang Mahkota Teknologi and MNC Studios 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 Studios International are associated (or correlated) with Elang Mahkota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elang Mahkota Teknologi has no effect on the direction of MNC Studios i.e., MNC Studios and Elang Mahkota go up and down completely randomly.

Pair Corralation between MNC Studios and Elang Mahkota

Assuming the 90 days trading horizon MNC Studios International is expected to under-perform the Elang Mahkota. In addition to that, MNC Studios is 1.1 times more volatile than Elang Mahkota Teknologi. It trades about -0.2 of its total potential returns per unit of risk. Elang Mahkota Teknologi is currently generating about 0.15 per unit of volatility. If you would invest  40,200  in Elang Mahkota Teknologi on September 4, 2024 and sell it today you would earn a total of  13,800  from holding Elang Mahkota Teknologi or generate 34.33% return on investment over 90 days.

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

MNC Studios International  vs.  Elang Mahkota Teknologi

MNC Studios International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MNC Studios International 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.

Elang Mahkota Teknologi

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elang Mahkota Teknologi are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Elang Mahkota disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MNC Studios and Elang Mahkota

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

The idea behind MNC Studios International and Elang Mahkota Teknologi 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.