Correlation Between Surya Citra and Medikaloka Hermina

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

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

Diversification Opportunities for Surya Citra and Medikaloka Hermina

0.41

Correlation Coefficient

Surya Citra  Medikaloka Hermina

Very weak diversification

The 3 months correlation between Surya and Medikaloka is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Surya Citra Media and Medikaloka Hermina PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medikaloka Hermina and Surya Citra 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 Surya Citra Media 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 Surya Citra i.e., Surya Citra and Medikaloka Hermina go up and down completely randomly.

Pair Corralation between Surya Citra and Medikaloka Hermina

Assuming the 90 days trading horizon Surya Citra is expected to generate 1.66 times less return on investment than Medikaloka Hermina. In addition to that, Surya Citra is 1.05 times more volatile than Medikaloka Hermina PT. It trades about 0.07 of its total potential returns per unit of risk. Medikaloka Hermina PT is currently generating about 0.13 per unit of volatility. If you would invest  129,500  in Medikaloka Hermina PT on September 2, 2024 and sell it today you would earn a total of  22,000  from holding Medikaloka Hermina PT or generate 16.99% return on investment over 90 days.

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

Surya Citra Media  vs.  Medikaloka Hermina PT

Surya Citra Media

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Surya Citra Media are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Surya Citra may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Medikaloka Hermina

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Medikaloka Hermina PT are ranked lower than 10 (%) 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 Surya Citra and Medikaloka Hermina

The main advantage of trading using opposite Surya Citra and Medikaloka Hermina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Citra 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 Surya Citra Media 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.