Correlation Between Matahari Department and Multi Medika
Can any of the company-specific risk be diversified away by investing in both Matahari Department and Multi Medika 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 Matahari Department and Multi Medika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matahari Department Store and Multi Medika Internasional, you can compare the effects of market volatilities on Matahari Department and Multi Medika 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 Matahari Department with a short position of Multi Medika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matahari Department and Multi Medika.
Diversification Opportunities for Matahari Department and Multi Medika
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matahari and Multi is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Matahari Department Store and Multi Medika Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Medika Interna and Matahari Department 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 Matahari Department Store are associated (or correlated) with Multi Medika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Medika Interna has no effect on the direction of Matahari Department i.e., Matahari Department and Multi Medika go up and down completely randomly.
Pair Corralation between Matahari Department and Multi Medika
Assuming the 90 days trading horizon Matahari Department Store is expected to under-perform the Multi Medika. But the stock apears to be less risky and, when comparing its historical volatility, Matahari Department Store is 2.05 times less risky than Multi Medika. The stock trades about -0.07 of its potential returns per unit of risk. The Multi Medika Internasional is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 24,200 in Multi Medika Internasional on September 2, 2024 and sell it today you would lose (16,700) from holding Multi Medika Internasional or give up 69.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Matahari Department Store vs. Multi Medika Internasional
Performance |
| Timeline |
| Matahari Department Store |
| Multi Medika Interna |
Matahari Department and Multi Medika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matahari Department and Multi Medika
The main advantage of trading using opposite Matahari Department and Multi Medika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matahari Department position performs unexpectedly, Multi Medika 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 Multi Medika will offset losses from the drop in Multi Medika's long position.| Matahari Department vs. Japfa Comfeed Indonesia | Matahari Department vs. Charoen Pokphand Indonesia | Matahari Department vs. Erajaya Swasembada Tbk | Matahari Department vs. Indofood Cbp Sukses |
| Multi Medika vs. Gozco Plantations Tbk | Multi Medika vs. Integra Indocabinet Tbk | Multi Medika vs. J Resources Asia | Multi Medika vs. Bhuwanatala Indah Permai |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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