Correlation Between Metro Healthcare and Bukit Uluwatu
Can any of the company-specific risk be diversified away by investing in both Metro Healthcare and Bukit Uluwatu 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 Bukit Uluwatu 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 Bukit Uluwatu Villa, you can compare the effects of market volatilities on Metro Healthcare and Bukit Uluwatu 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 Bukit Uluwatu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Healthcare and Bukit Uluwatu.
Diversification Opportunities for Metro Healthcare and Bukit Uluwatu
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Metro and Bukit is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Metro Healthcare Indonesia and Bukit Uluwatu Villa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Uluwatu Villa 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 Bukit Uluwatu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Uluwatu Villa has no effect on the direction of Metro Healthcare i.e., Metro Healthcare and Bukit Uluwatu go up and down completely randomly.
Pair Corralation between Metro Healthcare and Bukit Uluwatu
Assuming the 90 days trading horizon Metro Healthcare Indonesia is expected to generate 0.61 times more return on investment than Bukit Uluwatu. However, Metro Healthcare Indonesia is 1.63 times less risky than Bukit Uluwatu. It trades about 0.46 of its potential returns per unit of risk. Bukit Uluwatu Villa is currently generating about -0.01 per unit of risk. If you would invest 13,200 in Metro Healthcare Indonesia on September 12, 2024 and sell it today you would earn a total of 4,800 from holding Metro Healthcare Indonesia or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Healthcare Indonesia vs. Bukit Uluwatu Villa
Performance |
| Timeline |
| Metro Healthcare Ind |
| Bukit Uluwatu Villa |
Metro Healthcare and Bukit Uluwatu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Healthcare and Bukit Uluwatu
The main advantage of trading using opposite Metro Healthcare and Bukit Uluwatu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Healthcare position performs unexpectedly, Bukit Uluwatu 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 Bukit Uluwatu will offset losses from the drop in Bukit Uluwatu's long position.| Metro Healthcare vs. Medikaloka Hermina PT | Metro Healthcare vs. Sarana Meditama Metropolitan | Metro Healthcare vs. Mitra Keluarga Karyasehat | Metro Healthcare vs. Surya Permata Andalan |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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