Correlation Between Medikaloka Hermina and MAP Aktif

Can any of the company-specific risk be diversified away by investing in both Medikaloka Hermina and MAP Aktif 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 MAP Aktif 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 MAP Aktif Adiperkasa, you can compare the effects of market volatilities on Medikaloka Hermina and MAP Aktif 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 MAP Aktif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medikaloka Hermina and MAP Aktif.

Diversification Opportunities for Medikaloka Hermina and MAP Aktif

-0.36

Correlation Coefficient

Medikaloka Hermina  MAP Aktif

Very good diversification

The 3 months correlation between Medikaloka and MAP is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Medikaloka Hermina PT and MAP Aktif Adiperkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAP Aktif Adiperkasa 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 MAP Aktif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAP Aktif Adiperkasa has no effect on the direction of Medikaloka Hermina i.e., Medikaloka Hermina and MAP Aktif go up and down completely randomly.

Pair Corralation between Medikaloka Hermina and MAP Aktif

Assuming the 90 days trading horizon Medikaloka Hermina PT is expected to under-perform the MAP Aktif. But the stock apears to be less risky and, when comparing its historical volatility, Medikaloka Hermina PT is 1.66 times less risky than MAP Aktif. The stock trades about -0.01 of its potential returns per unit of risk. The MAP Aktif Adiperkasa is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  93,000  in MAP Aktif Adiperkasa on September 18, 2024 and sell it today you would earn a total of  10,000  from holding MAP Aktif Adiperkasa or generate 10.75% return on investment over 90 days.

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

Medikaloka Hermina PT  vs.  MAP Aktif Adiperkasa

Medikaloka Hermina

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Medikaloka Hermina PT has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

MAP Aktif Adiperkasa

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MAP Aktif Adiperkasa are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, MAP Aktif disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medikaloka Hermina and MAP Aktif

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

The idea behind Medikaloka Hermina PT and MAP Aktif Adiperkasa 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.