Correlation Between Metro Healthcare and Alumindo Light
Can any of the company-specific risk be diversified away by investing in both Metro Healthcare and Alumindo Light 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 Metro Healthcare and Alumindo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Healthcare Indonesia and Alumindo Light Metal, you can compare the effects of market volatilities on Metro Healthcare and Alumindo Light 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 Metro Healthcare with a short position of Alumindo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Healthcare and Alumindo Light.
Diversification Opportunities for Metro Healthcare and Alumindo Light
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Metro and Alumindo is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Metro Healthcare Indonesia and Alumindo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumindo Light Metal and Metro Healthcare 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 Metro Healthcare Indonesia are associated (or correlated) with Alumindo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumindo Light Metal has no effect on the direction of Metro Healthcare i.e., Metro Healthcare and Alumindo Light go up and down completely randomly.
Pair Corralation between Metro Healthcare and Alumindo Light
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 |
Metro Healthcare Indonesia vs. Alumindo Light Metal
Performance |
| Timeline |
| Metro Healthcare Ind |
| Alumindo Light Metal |
Metro Healthcare and Alumindo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Healthcare and Alumindo Light
The main advantage of trading using opposite Metro Healthcare and Alumindo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Healthcare position performs unexpectedly, Alumindo Light 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 Alumindo Light will offset losses from the drop in Alumindo Light's long position.| Metro Healthcare vs. Medikaloka Hermina PT | Metro Healthcare vs. Sarana Meditama Metropolitan | Metro Healthcare vs. Mitra Keluarga Karyasehat | Metro Healthcare vs. Bhakti Multi Artha |
| Alumindo Light vs. Perusahaan Gas Negara | Alumindo Light vs. Telkom Indonesia Tbk | Alumindo Light vs. Mitra Pinasthika Mustika | Alumindo Light vs. Jakarta Int Hotels |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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