Correlation Between Multi Medika and Sampoerna Agro
Can any of the company-specific risk be diversified away by investing in both Multi Medika and Sampoerna Agro 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 Sampoerna Agro 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 Sampoerna Agro Tbk, you can compare the effects of market volatilities on Multi Medika and Sampoerna Agro 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 Sampoerna Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Medika and Sampoerna Agro.
Diversification Opportunities for Multi Medika and Sampoerna Agro
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Multi and Sampoerna is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Multi Medika Internasional and Sampoerna Agro Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampoerna Agro Tbk 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 Sampoerna Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampoerna Agro Tbk has no effect on the direction of Multi Medika i.e., Multi Medika and Sampoerna Agro go up and down completely randomly.
Pair Corralation between Multi Medika and Sampoerna Agro
Assuming the 90 days trading horizon Multi Medika Internasional is expected to under-perform the Sampoerna Agro. In addition to that, Multi Medika is 6.57 times more volatile than Sampoerna Agro Tbk. It trades about -0.01 of its total potential returns per unit of risk. Sampoerna Agro Tbk is currently generating about 0.04 per unit of volatility. If you would invest 183,601 in Sampoerna Agro Tbk on November 2, 2024 and sell it today you would earn a total of 30,399 from holding Sampoerna Agro Tbk or generate 16.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Multi Medika Internasional vs. Sampoerna Agro Tbk
Performance |
| Timeline |
| Multi Medika Interna |
| Sampoerna Agro Tbk |
Multi Medika and Sampoerna Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Medika and Sampoerna Agro
The main advantage of trading using opposite Multi Medika and Sampoerna Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Medika position performs unexpectedly, Sampoerna Agro 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 Sampoerna Agro will offset losses from the drop in Sampoerna Agro's long position.| Multi Medika vs. Trinitan Metals and | Multi Medika vs. PT Indofood Sukses | Multi Medika vs. Inocycle Technology Tbk | Multi Medika vs. Indorama Synthetics Tbk |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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