Correlation Between Medikaloka Hermina and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Medikaloka Hermina and PT Sarana 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 PT Sarana 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 PT Sarana Menara, you can compare the effects of market volatilities on Medikaloka Hermina and PT Sarana 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 PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medikaloka Hermina and PT Sarana.
Diversification Opportunities for Medikaloka Hermina and PT Sarana
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Medikaloka and TOWR is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Medikaloka Hermina PT and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara 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 PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Medikaloka Hermina i.e., Medikaloka Hermina and PT Sarana go up and down completely randomly.
Pair Corralation between Medikaloka Hermina and PT Sarana
Assuming the 90 days trading horizon Medikaloka Hermina PT is expected to generate 1.39 times more return on investment than PT Sarana. However, Medikaloka Hermina is 1.39 times more volatile than PT Sarana Menara. It trades about -0.06 of its potential returns per unit of risk. PT Sarana Menara is currently generating about -0.28 per unit of risk. If you would invest 143,000 in Medikaloka Hermina PT on August 27, 2024 and sell it today you would lose (3,500) from holding Medikaloka Hermina PT or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medikaloka Hermina PT vs. PT Sarana Menara
Performance |
| Timeline |
| Medikaloka Hermina |
| PT Sarana Menara |
Medikaloka Hermina and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medikaloka Hermina and PT Sarana
The main advantage of trading using opposite Medikaloka Hermina and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medikaloka Hermina position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana's long position.| Medikaloka Hermina vs. Astra Graphia Tbk | Medikaloka Hermina vs. Hexindo Adiperkasa Tbk | Medikaloka Hermina vs. Lautan Luas Tbk | Medikaloka Hermina vs. Citra Marga Nusaphala |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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