Correlation Between Metro Healthcare and Batavia Prosperindo
Can any of the company-specific risk be diversified away by investing in both Metro Healthcare and Batavia Prosperindo 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 Batavia Prosperindo 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 Batavia Prosperindo Finance, you can compare the effects of market volatilities on Metro Healthcare and Batavia Prosperindo 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 Batavia Prosperindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Healthcare and Batavia Prosperindo.
Diversification Opportunities for Metro Healthcare and Batavia Prosperindo
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metro and Batavia is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Metro Healthcare Indonesia and Batavia Prosperindo Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batavia Prosperindo 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 Batavia Prosperindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batavia Prosperindo has no effect on the direction of Metro Healthcare i.e., Metro Healthcare and Batavia Prosperindo go up and down completely randomly.
Pair Corralation between Metro Healthcare and Batavia Prosperindo
Assuming the 90 days trading horizon Metro Healthcare Indonesia is expected to generate 3.03 times more return on investment than Batavia Prosperindo. However, Metro Healthcare is 3.03 times more volatile than Batavia Prosperindo Finance. It trades about 0.45 of its potential returns per unit of risk. Batavia Prosperindo Finance is currently generating about -0.09 per unit of risk. If you would invest 9,000 in Metro Healthcare Indonesia on August 31, 2024 and sell it today you would earn a total of 7,800 from holding Metro Healthcare Indonesia or generate 86.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Healthcare Indonesia vs. Batavia Prosperindo Finance
Performance |
| Timeline |
| Metro Healthcare Ind |
| Batavia Prosperindo |
Metro Healthcare and Batavia Prosperindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Healthcare and Batavia Prosperindo
The main advantage of trading using opposite Metro Healthcare and Batavia Prosperindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Healthcare position performs unexpectedly, Batavia Prosperindo 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 Batavia Prosperindo will offset losses from the drop in Batavia Prosperindo'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 |
| Batavia Prosperindo vs. Buana Finance Tbk | Batavia Prosperindo vs. Clipan Finance Indonesia | Batavia Prosperindo vs. Asuransi Bintang Tbk | Batavia Prosperindo vs. Bank Bumi Arta |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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