Correlation Between Bank Yudha and Medikaloka Hermina

Can any of the company-specific risk be diversified away by investing in both Bank Yudha and Medikaloka Hermina 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 Bank Yudha and Medikaloka Hermina into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank Yudha Bhakti and Medikaloka Hermina PT, you can compare the effects of market volatilities on Bank Yudha and Medikaloka Hermina 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 Bank Yudha with a short position of Medikaloka Hermina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Yudha and Medikaloka Hermina.

Diversification Opportunities for Bank Yudha and Medikaloka Hermina

-0.08

Correlation Coefficient

Bank Yudha  Medikaloka Hermina

Good diversification

The 3 months correlation between Bank and Medikaloka is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bank Yudha Bhakti and Medikaloka Hermina PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medikaloka Hermina and Bank Yudha 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 Bank Yudha Bhakti are associated (or correlated) with Medikaloka Hermina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medikaloka Hermina has no effect on the direction of Bank Yudha i.e., Bank Yudha and Medikaloka Hermina go up and down completely randomly.

Pair Corralation between Bank Yudha and Medikaloka Hermina

Assuming the 90 days trading horizon Bank Yudha Bhakti is expected to under-perform the Medikaloka Hermina. In addition to that, Bank Yudha is 2.13 times more volatile than Medikaloka Hermina PT. It trades about -0.03 of its total potential returns per unit of risk. Medikaloka Hermina PT is currently generating about 0.01 per unit of volatility. If you would invest  153,201  in Medikaloka Hermina PT on September 4, 2024 and sell it today you would lose (3,201) from holding Medikaloka Hermina PT or give up 2.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bank Yudha Bhakti  vs.  Medikaloka Hermina PT

Bank Yudha Bhakti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Yudha Bhakti has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Bank Yudha is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Medikaloka Hermina

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Medikaloka Hermina PT are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Medikaloka Hermina disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Yudha and Medikaloka Hermina

The main advantage of trading using opposite Bank Yudha and Medikaloka Hermina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Yudha position performs unexpectedly, Medikaloka Hermina 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 Medikaloka Hermina will offset losses from the drop in Medikaloka Hermina's long position.

The idea behind Bank Yudha Bhakti and Medikaloka Hermina PT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.