Correlation Between Metro Healthcare and Mandala Multifinance
Can any of the company-specific risk be diversified away by investing in both Metro Healthcare and Mandala Multifinance 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 Mandala Multifinance 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 Mandala Multifinance Tbk, you can compare the effects of market volatilities on Metro Healthcare and Mandala Multifinance 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 Mandala Multifinance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Healthcare and Mandala Multifinance.
Diversification Opportunities for Metro Healthcare and Mandala Multifinance
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Metro and Mandala is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Metro Healthcare Indonesia and Mandala Multifinance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mandala Multifinance Tbk 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 Mandala Multifinance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mandala Multifinance Tbk has no effect on the direction of Metro Healthcare i.e., Metro Healthcare and Mandala Multifinance go up and down completely randomly.
Pair Corralation between Metro Healthcare and Mandala Multifinance
Assuming the 90 days trading horizon Metro Healthcare Indonesia is expected to generate 2.33 times more return on investment than Mandala Multifinance. However, Metro Healthcare is 2.33 times more volatile than Mandala Multifinance Tbk. It trades about 0.45 of its potential returns per unit of risk. Mandala Multifinance Tbk is currently generating about -0.07 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Healthcare Indonesia vs. Mandala Multifinance Tbk
Performance |
| Timeline |
| Metro Healthcare Ind |
| Mandala Multifinance Tbk |
Metro Healthcare and Mandala Multifinance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Healthcare and Mandala Multifinance
The main advantage of trading using opposite Metro Healthcare and Mandala Multifinance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Healthcare position performs unexpectedly, Mandala Multifinance 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 Mandala Multifinance will offset losses from the drop in Mandala Multifinance's long position.| Metro Healthcare vs. Medikaloka Hermina PT | Metro Healthcare vs. Mitra Keluarga Karyasehat | Metro Healthcare vs. Bhakti Multi Artha | Metro Healthcare vs. Surya Permata Andalan |
| Mandala Multifinance vs. Paninvest Tbk | Mandala Multifinance vs. Maskapai Reasuransi Indonesia | Mandala Multifinance vs. Panin Sekuritas Tbk | Mandala Multifinance vs. Wahana Ottomitra Multiartha |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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