Correlation Between Mnc Land and Medikaloka Hermina

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

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

Diversification Opportunities for Mnc Land and Medikaloka Hermina

0.5

Correlation Coefficient

Mnc Land  Medikaloka Hermina

Very weak diversification

The 3 months correlation between Mnc and Medikaloka is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mnc Land Tbk and Medikaloka Hermina PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medikaloka Hermina and Mnc Land 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 Mnc Land Tbk 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 Mnc Land i.e., Mnc Land and Medikaloka Hermina go up and down completely randomly.

Pair Corralation between Mnc Land and Medikaloka Hermina

Assuming the 90 days trading horizon Mnc Land Tbk is expected to under-perform the Medikaloka Hermina. In addition to that, Mnc Land is 1.54 times more volatile than Medikaloka Hermina PT. It trades about -0.09 of its total potential returns per unit of risk. Medikaloka Hermina PT is currently generating about 0.03 per unit of volatility. If you would invest  131,500  in Medikaloka Hermina PT on December 4, 2024 and sell it today you would earn a total of  1,500  from holding Medikaloka Hermina PT or generate 1.14% return on investment over 90 days.

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

Mnc Land Tbk  vs.  Medikaloka Hermina PT

Mnc Land Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mnc Land Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Medikaloka Hermina

Risk-Adjusted Performance

Very Weak

Over the last 90 days Medikaloka Hermina PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Mnc Land and Medikaloka Hermina

The main advantage of trading using opposite Mnc Land and Medikaloka Hermina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mnc Land 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 Mnc Land Tbk 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.