Correlation Between Mitra Keluarga and Bundamedik Tbk

Can any of the company-specific risk be diversified away by investing in both Mitra Keluarga and Bundamedik Tbk 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 Mitra Keluarga and Bundamedik Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Mitra Keluarga and Bundamedik Tbk

0.5

Correlation Coefficient

Mitra Keluarga  Bundamedik Tbk

Very weak diversification

The 3 months correlation between Mitra and Bundamedik is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Keluarga Karyasehat and Bundamedik Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bundamedik Tbk PT and Mitra Keluarga 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 Mitra Keluarga Karyasehat are associated (or correlated) with Bundamedik Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bundamedik Tbk PT has no effect on the direction of Mitra Keluarga i.e., Mitra Keluarga and Bundamedik Tbk go up and down completely randomly.

Pair Corralation between Mitra Keluarga and Bundamedik Tbk

Assuming the 90 days trading horizon Mitra Keluarga Karyasehat is expected to under-perform the Bundamedik Tbk. But the stock apears to be less risky and, when comparing its historical volatility, Mitra Keluarga Karyasehat is 1.03 times less risky than Bundamedik Tbk. The stock trades about -0.09 of its potential returns per unit of risk. The Bundamedik Tbk PT is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  29,600  in Bundamedik Tbk PT on September 1, 2024 and sell it today you would lose (2,800) from holding Bundamedik Tbk PT or give up 9.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Mitra Keluarga Karyasehat  vs.  Bundamedik Tbk PT

Mitra Keluarga Karyasehat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitra Keluarga Karyasehat 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.

Bundamedik Tbk PT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bundamedik Tbk 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 Mitra Keluarga and Bundamedik Tbk

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

The idea behind Mitra Keluarga Karyasehat and Bundamedik Tbk 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.