Correlation Between Map Boga and Medikaloka Hermina

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

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

Diversification Opportunities for Map Boga and Medikaloka Hermina

0.36

Correlation Coefficient

Map Boga  Medikaloka Hermina

Weak diversification

The 3 months correlation between Map and Medikaloka is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Map Boga Adiperkasa and Medikaloka Hermina PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medikaloka Hermina and Map Boga 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 Map Boga Adiperkasa 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 Map Boga i.e., Map Boga and Medikaloka Hermina go up and down completely randomly.

Pair Corralation between Map Boga and Medikaloka Hermina

Assuming the 90 days trading horizon Map Boga Adiperkasa is expected to under-perform the Medikaloka Hermina. But the stock apears to be less risky and, when comparing its historical volatility, Map Boga Adiperkasa is 1.09 times less risky than Medikaloka Hermina. The stock trades about -0.21 of its potential returns per unit of risk. The Medikaloka Hermina PT is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  147,000  in Medikaloka Hermina PT on September 18, 2024 and sell it today you would lose (2,500) from holding Medikaloka Hermina PT or give up 1.7% of portfolio value over 90 days.

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

Map Boga Adiperkasa  vs.  Medikaloka Hermina PT

Map Boga Adiperkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Map Boga Adiperkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.

Pair Trading with Map Boga and Medikaloka Hermina

The main advantage of trading using opposite Map Boga and Medikaloka Hermina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Map Boga 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 Map Boga Adiperkasa 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.