Correlation Between Medikaloka Hermina and Bali Towerindo
Can any of the company-specific risk be diversified away by investing in both Medikaloka Hermina and Bali Towerindo 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 Medikaloka Hermina and Bali Towerindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medikaloka Hermina PT and Bali Towerindo Sentra, you can compare the effects of market volatilities on Medikaloka Hermina and Bali Towerindo 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 Medikaloka Hermina with a short position of Bali Towerindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medikaloka Hermina and Bali Towerindo.
Diversification Opportunities for Medikaloka Hermina and Bali Towerindo
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Medikaloka and Bali is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Medikaloka Hermina PT and Bali Towerindo Sentra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bali Towerindo Sentra and Medikaloka Hermina 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 Medikaloka Hermina PT are associated (or correlated) with Bali Towerindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bali Towerindo Sentra has no effect on the direction of Medikaloka Hermina i.e., Medikaloka Hermina and Bali Towerindo go up and down completely randomly.
Pair Corralation between Medikaloka Hermina and Bali Towerindo
Assuming the 90 days trading horizon Medikaloka Hermina is expected to generate 4.14 times less return on investment than Bali Towerindo. But when comparing it to its historical volatility, Medikaloka Hermina PT is 2.03 times less risky than Bali Towerindo. It trades about 0.03 of its potential returns per unit of risk. Bali Towerindo Sentra is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 71,771 in Bali Towerindo Sentra on September 1, 2024 and sell it today you would earn a total of 54,229 from holding Bali Towerindo Sentra or generate 75.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Medikaloka Hermina PT vs. Bali Towerindo Sentra
Performance |
| Timeline |
| Medikaloka Hermina |
| Bali Towerindo Sentra |
Medikaloka Hermina and Bali Towerindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medikaloka Hermina and Bali Towerindo
The main advantage of trading using opposite Medikaloka Hermina and Bali Towerindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medikaloka Hermina position performs unexpectedly, Bali Towerindo 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 Bali Towerindo will offset losses from the drop in Bali Towerindo's long position.| Medikaloka Hermina vs. Matahari Department Store | Medikaloka Hermina vs. Surya Citra Media | Medikaloka Hermina vs. Lippo Karawaci Tbk |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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