Correlation Between Metro Healthcare and Bank Tabungan
Can any of the company-specific risk be diversified away by investing in both Metro Healthcare and Bank Tabungan 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 Bank Tabungan 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 Bank Tabungan Negara, you can compare the effects of market volatilities on Metro Healthcare and Bank Tabungan 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 Bank Tabungan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Healthcare and Bank Tabungan.
Diversification Opportunities for Metro Healthcare and Bank Tabungan
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metro and Bank is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Metro Healthcare Indonesia and Bank Tabungan Negara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Tabungan Negara 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 Bank Tabungan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Tabungan Negara has no effect on the direction of Metro Healthcare i.e., Metro Healthcare and Bank Tabungan go up and down completely randomly.
Pair Corralation between Metro Healthcare and Bank Tabungan
Assuming the 90 days trading horizon Metro Healthcare Indonesia is expected to generate 2.06 times more return on investment than Bank Tabungan. However, Metro Healthcare is 2.06 times more volatile than Bank Tabungan Negara. It trades about 0.41 of its potential returns per unit of risk. Bank Tabungan Negara is currently generating about -0.26 per unit of risk. If you would invest 13,100 in Metro Healthcare Indonesia on September 1, 2024 and sell it today you would earn a total of 4,000 from holding Metro Healthcare Indonesia or generate 30.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Healthcare Indonesia vs. Bank Tabungan Negara
Performance |
| Timeline |
| Metro Healthcare Ind |
| Bank Tabungan Negara |
Metro Healthcare and Bank Tabungan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Healthcare and Bank Tabungan
The main advantage of trading using opposite Metro Healthcare and Bank Tabungan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Healthcare position performs unexpectedly, Bank Tabungan 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 Bank Tabungan will offset losses from the drop in Bank Tabungan'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 |
| Bank Tabungan vs. Bank BRISyariah Tbk | Bank Tabungan vs. Ace Hardware Indonesia | Bank Tabungan vs. Merdeka Copper Gold | Bank Tabungan vs. Mitra Pinasthika Mustika |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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