Correlation Between Mitra Keluarga and Medikaloka Hermina

Can any of the company-specific risk be diversified away by investing in both Mitra Keluarga 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 Mitra Keluarga and Medikaloka Hermina 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 Medikaloka Hermina PT, you can compare the effects of market volatilities on Mitra Keluarga 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 Mitra Keluarga with a short position of Medikaloka Hermina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Keluarga and Medikaloka Hermina.

Diversification Opportunities for Mitra Keluarga and Medikaloka Hermina

-0.18

Correlation Coefficient

Mitra Keluarga  Medikaloka Hermina

Good diversification

The 3 months correlation between Mitra and Medikaloka is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Keluarga Karyasehat and Medikaloka Hermina PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medikaloka Hermina 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 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 Mitra Keluarga i.e., Mitra Keluarga and Medikaloka Hermina go up and down completely randomly.

Pair Corralation between Mitra Keluarga and Medikaloka Hermina

Assuming the 90 days trading horizon Mitra Keluarga Karyasehat is expected to generate 0.81 times more return on investment than Medikaloka Hermina. However, Mitra Keluarga Karyasehat is 1.23 times less risky than Medikaloka Hermina. It trades about -0.05 of its potential returns per unit of risk. Medikaloka Hermina PT is currently generating about -0.05 per unit of risk. If you would invest  258,000  in Mitra Keluarga Karyasehat on November 29, 2024 and sell it today you would lose (16,000) from holding Mitra Keluarga Karyasehat or give up 6.2% of portfolio value over 90 days.

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

Mitra Keluarga Karyasehat  vs.  Medikaloka Hermina PT

Mitra Keluarga Karyasehat

Risk-Adjusted Performance

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 quite persistent forward-looking signals, Mitra Keluarga 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

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 Mitra Keluarga and Medikaloka Hermina

The main advantage of trading using opposite Mitra Keluarga and Medikaloka Hermina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Keluarga 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 Mitra Keluarga Karyasehat 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.