Correlation Between Sampoerna Agro and Multi Medika
Can any of the company-specific risk be diversified away by investing in both Sampoerna Agro and Multi Medika 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 Sampoerna Agro and Multi Medika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampoerna Agro Tbk and Multi Medika Internasional, you can compare the effects of market volatilities on Sampoerna Agro and Multi Medika 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 Sampoerna Agro with a short position of Multi Medika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampoerna Agro and Multi Medika.
Diversification Opportunities for Sampoerna Agro and Multi Medika
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sampoerna and Multi is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sampoerna Agro Tbk and Multi Medika Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Medika Interna and Sampoerna Agro 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 Sampoerna Agro Tbk are associated (or correlated) with Multi Medika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Medika Interna has no effect on the direction of Sampoerna Agro i.e., Sampoerna Agro and Multi Medika go up and down completely randomly.
Pair Corralation between Sampoerna Agro and Multi Medika
Assuming the 90 days trading horizon Sampoerna Agro is expected to generate 28.19 times less return on investment than Multi Medika. But when comparing it to its historical volatility, Sampoerna Agro Tbk is 17.86 times less risky than Multi Medika. It trades about 0.26 of its potential returns per unit of risk. Multi Medika Internasional is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 9,100 in Multi Medika Internasional on October 21, 2024 and sell it today you would earn a total of 11,300 from holding Multi Medika Internasional or generate 124.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampoerna Agro Tbk vs. Multi Medika Internasional
Performance |
| Timeline |
| Sampoerna Agro Tbk |
| Multi Medika Interna |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Sampoerna Agro and Multi Medika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampoerna Agro and Multi Medika
The main advantage of trading using opposite Sampoerna Agro and Multi Medika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampoerna Agro position performs unexpectedly, Multi Medika 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 Multi Medika will offset losses from the drop in Multi Medika's long position.| Sampoerna Agro vs. Bakrie Sumatera Plantations | Sampoerna Agro vs. Perusahaan Perkebunan London | Sampoerna Agro vs. Astra Agro Lestari | Sampoerna Agro vs. Tunas Baru Lampung |
| Multi Medika vs. HK Metals Utama | Multi Medika vs. Chandra Asri Petrochemical | Multi Medika vs. Smartfren Telecom Tbk | Multi Medika vs. Trinitan Metals and |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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