Correlation Between Multi Medika and Lancartama Sejati
Can any of the company-specific risk be diversified away by investing in both Multi Medika and Lancartama Sejati 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 Lancartama Sejati 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 Lancartama Sejati Tbk, you can compare the effects of market volatilities on Multi Medika and Lancartama Sejati 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 Lancartama Sejati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Medika and Lancartama Sejati.
Diversification Opportunities for Multi Medika and Lancartama Sejati
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Multi and Lancartama is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Multi Medika Internasional and Lancartama Sejati Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancartama Sejati 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 Lancartama Sejati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancartama Sejati Tbk has no effect on the direction of Multi Medika i.e., Multi Medika and Lancartama Sejati go up and down completely randomly.
Pair Corralation between Multi Medika and Lancartama Sejati
Assuming the 90 days trading horizon Multi Medika Internasional is expected to generate 1.09 times more return on investment than Lancartama Sejati. However, Multi Medika is 1.09 times more volatile than Lancartama Sejati Tbk. It trades about 0.11 of its potential returns per unit of risk. Lancartama Sejati Tbk is currently generating about 0.02 per unit of risk. If you would invest 6,300 in Multi Medika Internasional on September 12, 2024 and sell it today you would earn a total of 1,900 from holding Multi Medika Internasional or generate 30.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Multi Medika Internasional vs. Lancartama Sejati Tbk
Performance |
| Timeline |
| Multi Medika Interna |
| Lancartama Sejati Tbk |
Multi Medika and Lancartama Sejati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Medika and Lancartama Sejati
The main advantage of trading using opposite Multi Medika and Lancartama Sejati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Medika position performs unexpectedly, Lancartama Sejati 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 Lancartama Sejati will offset losses from the drop in Lancartama Sejati's long position.| Multi Medika vs. Yelooo Integra Datanet | Multi Medika vs. Lion Metal Works | Multi Medika vs. Dunia Virtual Online | Multi Medika vs. Bank Ocbc Nisp |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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