Correlation Between Medikaloka Hermina and Itama Ranoraya
Can any of the company-specific risk be diversified away by investing in both Medikaloka Hermina and Itama Ranoraya 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 Itama Ranoraya 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 Itama Ranoraya, you can compare the effects of market volatilities on Medikaloka Hermina and Itama Ranoraya 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 Itama Ranoraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medikaloka Hermina and Itama Ranoraya.
Diversification Opportunities for Medikaloka Hermina and Itama Ranoraya
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Medikaloka and Itama is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Medikaloka Hermina PT and Itama Ranoraya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itama Ranoraya 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 Itama Ranoraya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itama Ranoraya has no effect on the direction of Medikaloka Hermina i.e., Medikaloka Hermina and Itama Ranoraya go up and down completely randomly.
Pair Corralation between Medikaloka Hermina and Itama Ranoraya
Assuming the 90 days trading horizon Medikaloka Hermina PT is expected to generate 2.16 times more return on investment than Itama Ranoraya. However, Medikaloka Hermina is 2.16 times more volatile than Itama Ranoraya. It trades about 0.03 of its potential returns per unit of risk. Itama Ranoraya is currently generating about -0.48 per unit of risk. If you would invest 150,000 in Medikaloka Hermina PT on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Medikaloka Hermina PT or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medikaloka Hermina PT vs. Itama Ranoraya
Performance |
| Timeline |
| Medikaloka Hermina |
| Itama Ranoraya |
Medikaloka Hermina and Itama Ranoraya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medikaloka Hermina and Itama Ranoraya
The main advantage of trading using opposite Medikaloka Hermina and Itama Ranoraya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medikaloka Hermina position performs unexpectedly, Itama Ranoraya 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 Itama Ranoraya will offset losses from the drop in Itama Ranoraya's long position.| Medikaloka Hermina vs. Matahari Department Store | Medikaloka Hermina vs. Surya Citra Media | Medikaloka Hermina vs. Lippo Karawaci Tbk |
| Itama Ranoraya vs. Kimia Farma Persero | Itama Ranoraya vs. Indofarma Tbk | Itama Ranoraya vs. Bank BRISyariah Tbk | Itama Ranoraya vs. Bank Rakyat Indonesia |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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