Correlation Between Medikaloka Hermina and Surya Esa

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

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

Diversification Opportunities for Medikaloka Hermina and Surya Esa

0.57

Correlation Coefficient

Medikaloka Hermina  Surya Esa

Very weak diversification

The 3 months correlation between Medikaloka and Surya is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Medikaloka Hermina PT and Surya Esa Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Esa Perkasa and Medikaloka Hermina 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 Medikaloka Hermina PT are associated (or correlated) with Surya Esa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Esa Perkasa has no effect on the direction of Medikaloka Hermina i.e., Medikaloka Hermina and Surya Esa go up and down completely randomly.

Pair Corralation between Medikaloka Hermina and Surya Esa

Assuming the 90 days trading horizon Medikaloka Hermina PT is expected to generate 0.78 times more return on investment than Surya Esa. However, Medikaloka Hermina PT is 1.28 times less risky than Surya Esa. It trades about 0.12 of its potential returns per unit of risk. Surya Esa Perkasa is currently generating about 0.01 per unit of risk. If you would invest  130,000  in Medikaloka Hermina PT on September 4, 2024 and sell it today you would earn a total of  20,000  from holding Medikaloka Hermina PT or generate 15.38% return on investment over 90 days.

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

Medikaloka Hermina PT  vs.  Surya Esa Perkasa

Medikaloka Hermina

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Medikaloka Hermina PT are ranked lower than 9 (%) 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.

Surya Esa Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surya Esa Perkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Surya Esa 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 Medikaloka Hermina and Surya Esa

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

The idea behind Medikaloka Hermina PT and Surya Esa Perkasa 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..