Correlation Between Mitra Adiperkasa and Medikaloka Hermina
Can any of the company-specific risk be diversified away by investing in both Mitra Adiperkasa and Medikaloka Hermina 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 Mitra Adiperkasa and Medikaloka Hermina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitra Adiperkasa Tbk and Medikaloka Hermina PT, you can compare the effects of market volatilities on Mitra Adiperkasa and Medikaloka Hermina 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 Mitra Adiperkasa with a short position of Medikaloka Hermina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Adiperkasa and Medikaloka Hermina.
Diversification Opportunities for Mitra Adiperkasa and Medikaloka Hermina
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitra and Medikaloka is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Adiperkasa Tbk and Medikaloka Hermina PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medikaloka Hermina and Mitra Adiperkasa 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 Mitra Adiperkasa Tbk are associated (or correlated) with Medikaloka Hermina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medikaloka Hermina has no effect on the direction of Mitra Adiperkasa i.e., Mitra Adiperkasa and Medikaloka Hermina go up and down completely randomly.
Pair Corralation between Mitra Adiperkasa and Medikaloka Hermina
Assuming the 90 days trading horizon Mitra Adiperkasa is expected to generate 3.84 times less return on investment than Medikaloka Hermina. In addition to that, Mitra Adiperkasa is 1.68 times more volatile than Medikaloka Hermina PT. It trades about 0.01 of its total potential returns per unit of risk. Medikaloka Hermina PT is currently generating about 0.05 per unit of volatility. If you would invest 130,000 in Medikaloka Hermina PT on August 29, 2024 and sell it today you would earn a total of 7,000 from holding Medikaloka Hermina PT or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Mitra Adiperkasa Tbk vs. Medikaloka Hermina PT
Performance |
| Timeline |
| Mitra Adiperkasa Tbk |
| Medikaloka Hermina |
Mitra Adiperkasa and Medikaloka Hermina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Adiperkasa and Medikaloka Hermina
The main advantage of trading using opposite Mitra Adiperkasa and Medikaloka Hermina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Adiperkasa position performs unexpectedly, Medikaloka Hermina 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 Medikaloka Hermina will offset losses from the drop in Medikaloka Hermina's long position.| Mitra Adiperkasa vs. Ramayana Lestari Sentosa | Mitra Adiperkasa vs. Ace Hardware Indonesia | Mitra Adiperkasa vs. Summarecon Agung Tbk | Mitra Adiperkasa vs. Media Nusantara Citra |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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