Correlation Between Multi Medika and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Multi Medika and Dow Jones 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 Multi Medika and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Medika Internasional and Dow Jones Industrial, you can compare the effects of market volatilities on Multi Medika and Dow Jones 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 Multi Medika with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Medika and Dow Jones.
Diversification Opportunities for Multi Medika and Dow Jones
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and Dow is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Multi Medika Internasional and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Multi Medika 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 Multi Medika Internasional are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Multi Medika i.e., Multi Medika and Dow Jones go up and down completely randomly.
Pair Corralation between Multi Medika and Dow Jones
Assuming the 90 days trading horizon Multi Medika Internasional is expected to generate 7.48 times more return on investment than Dow Jones. However, Multi Medika is 7.48 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of risk. If you would invest 8,100 in Multi Medika Internasional on August 27, 2024 and sell it today you would earn a total of 100.00 from holding Multi Medika Internasional or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.62% |
| Values | Daily Returns |
Multi Medika Internasional vs. Dow Jones Industrial
Performance |
| Timeline |
Multi Medika and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Multi Medika Internasional
Pair trading matchups for Multi Medika
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Multi Medika and Dow Jones
The main advantage of trading using opposite Multi Medika and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Medika position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Multi Medika vs. Bakrie Brothers Tbk | Multi Medika vs. Langgeng Makmur Industri | Multi Medika vs. Petrosea Tbk | Multi Medika vs. Graha Layar Prima |
| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |