Correlation Between United Tractors and Multi Medika
Can any of the company-specific risk be diversified away by investing in both United Tractors 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 United Tractors and Multi Medika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Tractors Tbk and Multi Medika Internasional, you can compare the effects of market volatilities on United Tractors 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 United Tractors with a short position of Multi Medika. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Tractors and Multi Medika.
Diversification Opportunities for United Tractors and Multi Medika
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Multi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding United Tractors 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 United Tractors 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 United Tractors 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 United Tractors i.e., United Tractors and Multi Medika go up and down completely randomly.
Pair Corralation between United Tractors and Multi Medika
Assuming the 90 days trading horizon United Tractors is expected to generate 1.3 times less return on investment than Multi Medika. But when comparing it to its historical volatility, United Tractors Tbk is 2.4 times less risky than Multi Medika. It trades about 0.17 of its potential returns per unit of risk. Multi Medika Internasional is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,800 in Multi Medika Internasional on September 14, 2024 and sell it today you would earn a total of 500.00 from holding Multi Medika Internasional or generate 6.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
United Tractors Tbk vs. Multi Medika Internasional
Performance |
| Timeline |
| United Tractors Tbk |
| Multi Medika Interna |
United Tractors and Multi Medika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Tractors and Multi Medika
The main advantage of trading using opposite United Tractors and Multi Medika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Tractors 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.| United Tractors vs. Harum Energy Tbk | United Tractors vs. Delta Dunia Makmur | United Tractors vs. Adi Sarana Armada | United Tractors vs. Elang Mahkota Teknologi |
| Multi Medika vs. Digital Mediatama Maxima | Multi Medika vs. United Tractors Tbk | Multi Medika vs. Integra Indocabinet Tbk | Multi Medika vs. PT MNC Energy |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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