Correlation Between Multi Medika and Garuda Indonesia
Can any of the company-specific risk be diversified away by investing in both Multi Medika and Garuda Indonesia 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 Garuda Indonesia 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 Garuda Indonesia Persero, you can compare the effects of market volatilities on Multi Medika and Garuda Indonesia 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 Garuda Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Medika and Garuda Indonesia.
Diversification Opportunities for Multi Medika and Garuda Indonesia
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Multi and Garuda is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Multi Medika Internasional and Garuda Indonesia Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garuda Indonesia Persero 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 Garuda Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garuda Indonesia Persero has no effect on the direction of Multi Medika i.e., Multi Medika and Garuda Indonesia go up and down completely randomly.
Pair Corralation between Multi Medika and Garuda Indonesia
Assuming the 90 days trading horizon Multi Medika is expected to generate 1.38 times less return on investment than Garuda Indonesia. In addition to that, Multi Medika is 1.46 times more volatile than Garuda Indonesia Persero. It trades about 0.03 of its total potential returns per unit of risk. Garuda Indonesia Persero is currently generating about 0.07 per unit of volatility. If you would invest 5,800 in Garuda Indonesia Persero on September 2, 2024 and sell it today you would earn a total of 200.00 from holding Garuda Indonesia Persero or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Medika Internasional vs. Garuda Indonesia Persero
Performance |
| Timeline |
| Multi Medika Interna |
| Garuda Indonesia Persero |
Multi Medika and Garuda Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Medika and Garuda Indonesia
The main advantage of trading using opposite Multi Medika and Garuda Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Medika position performs unexpectedly, Garuda Indonesia 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 Garuda Indonesia will offset losses from the drop in Garuda Indonesia's long position.| Multi Medika vs. Gozco Plantations Tbk | Multi Medika vs. Integra Indocabinet Tbk | Multi Medika vs. J Resources Asia | Multi Medika vs. Bhuwanatala Indah Permai |
| Garuda Indonesia vs. Krakatau Steel Persero | Garuda Indonesia vs. Jasa Marga Tbk | Garuda Indonesia vs. Wijaya Karya Beton | Garuda Indonesia vs. Adhi Karya Persero |
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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