Correlation Between MD Pictures and Medikaloka Hermina

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

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

Diversification Opportunities for MD Pictures and Medikaloka Hermina

-0.58

Correlation Coefficient

MD Pictures  Medikaloka Hermina

Excellent diversification

The 3 months correlation between FILM and Medikaloka is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding MD Pictures 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 MD Pictures 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 MD Pictures 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 MD Pictures i.e., MD Pictures and Medikaloka Hermina go up and down completely randomly.

Pair Corralation between MD Pictures and Medikaloka Hermina

Assuming the 90 days trading horizon MD Pictures Tbk is expected to under-perform the Medikaloka Hermina. In addition to that, MD Pictures is 1.89 times more volatile than Medikaloka Hermina PT. It trades about -0.01 of its total potential returns per unit of risk. Medikaloka Hermina PT is currently generating about 0.04 per unit of volatility. If you would invest  140,500  in Medikaloka Hermina PT on September 14, 2024 and sell it today you would earn a total of  4,500  from holding Medikaloka Hermina PT or generate 3.2% return on investment over 90 days.

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

MD Pictures Tbk  vs.  Medikaloka Hermina PT

MD Pictures Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MD Pictures Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, MD Pictures 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

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Medikaloka Hermina PT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Medikaloka Hermina is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MD Pictures and Medikaloka Hermina

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

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.