Correlation Between Alumindo Light and Metro Healthcare
Can any of the company-specific risk be diversified away by investing in both Alumindo Light and Metro Healthcare 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 Alumindo Light and Metro Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alumindo Light Metal and Metro Healthcare Indonesia, you can compare the effects of market volatilities on Alumindo Light and Metro Healthcare 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 Alumindo Light with a short position of Metro Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumindo Light and Metro Healthcare.
Diversification Opportunities for Alumindo Light and Metro Healthcare
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alumindo and Metro is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Alumindo Light Metal and Metro Healthcare Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Healthcare Ind and Alumindo Light 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 Alumindo Light Metal are associated (or correlated) with Metro Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Healthcare Ind has no effect on the direction of Alumindo Light i.e., Alumindo Light and Metro Healthcare go up and down completely randomly.
Pair Corralation between Alumindo Light and Metro Healthcare
If you would invest 13,000 in Metro Healthcare Indonesia on September 2, 2024 and sell it today you would earn a total of 4,100 from holding Metro Healthcare Indonesia or generate 31.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Alumindo Light Metal vs. Metro Healthcare Indonesia
Performance |
| Timeline |
| Alumindo Light Metal |
| Metro Healthcare Ind |
Alumindo Light and Metro Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumindo Light and Metro Healthcare
The main advantage of trading using opposite Alumindo Light and Metro Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumindo Light position performs unexpectedly, Metro Healthcare 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 Metro Healthcare will offset losses from the drop in Metro Healthcare's long position.| Alumindo Light vs. Perusahaan Gas Negara | Alumindo Light vs. Telkom Indonesia Tbk | Alumindo Light vs. Mitra Pinasthika Mustika | Alumindo Light vs. Jakarta Int Hotels |
| Metro Healthcare vs. Medikaloka Hermina PT | Metro Healthcare vs. Sarana Meditama Metropolitan | Metro Healthcare vs. Mitra Keluarga Karyasehat | Metro Healthcare vs. Bhakti Multi Artha |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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