Correlation Between Metro Healthcare and Bank Jabar
Can any of the company-specific risk be diversified away by investing in both Metro Healthcare and Bank Jabar 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 Jabar 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 Jabar, you can compare the effects of market volatilities on Metro Healthcare and Bank Jabar 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 Jabar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Healthcare and Bank Jabar.
Diversification Opportunities for Metro Healthcare and Bank Jabar
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Metro and Bank is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Metro Healthcare Indonesia and Bank Jabar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Jabar 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 Jabar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Jabar has no effect on the direction of Metro Healthcare i.e., Metro Healthcare and Bank Jabar go up and down completely randomly.
Pair Corralation between Metro Healthcare and Bank Jabar
Assuming the 90 days trading horizon Metro Healthcare Indonesia is expected to generate 4.29 times more return on investment than Bank Jabar. However, Metro Healthcare is 4.29 times more volatile than Bank Jabar. It trades about 0.44 of its potential returns per unit of risk. Bank Jabar is currently generating about -0.06 per unit of risk. If you would invest 12,400 in Metro Healthcare Indonesia on August 29, 2024 and sell it today you would earn a total of 4,600 from holding Metro Healthcare Indonesia or generate 37.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Metro Healthcare Indonesia vs. Bank Jabar
Performance |
| Timeline |
| Metro Healthcare Ind |
| Bank Jabar |
Metro Healthcare and Bank Jabar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Healthcare and Bank Jabar
The main advantage of trading using opposite Metro Healthcare and Bank Jabar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Healthcare position performs unexpectedly, Bank Jabar 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 Jabar will offset losses from the drop in Bank Jabar'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 Jabar vs. Bank Pembangunan Timur | Bank Jabar vs. Bank Tabungan Negara | Bank Jabar vs. Bank Danamon Indonesia | Bank Jabar vs. Bumi Serpong Damai |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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