Correlation Between Tower Bersama and Mnc Investama

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

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

Diversification Opportunities for Tower Bersama and Mnc Investama

-0.73

Correlation Coefficient

Tower Bersama  Mnc Investama

Pay attention - limited upside

The 3 months correlation between Tower and Mnc is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tower Bersama Infrastructure and Mnc Investama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Investama Tbk and Tower Bersama 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 Tower Bersama Infrastructure are associated (or correlated) with Mnc Investama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Investama Tbk has no effect on the direction of Tower Bersama i.e., Tower Bersama and Mnc Investama go up and down completely randomly.

Pair Corralation between Tower Bersama and Mnc Investama

Assuming the 90 days trading horizon Tower Bersama Infrastructure is expected to generate 0.69 times more return on investment than Mnc Investama. However, Tower Bersama Infrastructure is 1.44 times less risky than Mnc Investama. It trades about 0.05 of its potential returns per unit of risk. Mnc Investama Tbk is currently generating about -0.32 per unit of risk. If you would invest  193,494  in Tower Bersama Infrastructure on September 28, 2024 and sell it today you would earn a total of  2,006  from holding Tower Bersama Infrastructure or generate 1.04% return on investment over 90 days.

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

Tower Bersama Infrastructure  vs.  Mnc Investama Tbk

Tower Bersama Infras

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tower Bersama Infrastructure are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Tower Bersama is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Mnc Investama Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mnc Investama Tbk 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.

Pair Trading with Tower Bersama and Mnc Investama

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

The idea behind Tower Bersama Infrastructure and Mnc Investama 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .