Correlation Between Metro Healthcare and Trimegah Securities
Can any of the company-specific risk be diversified away by investing in both Metro Healthcare and Trimegah Securities 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 Trimegah Securities 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 Trimegah Securities Tbk, you can compare the effects of market volatilities on Metro Healthcare and Trimegah Securities 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 Trimegah Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Healthcare and Trimegah Securities.
Diversification Opportunities for Metro Healthcare and Trimegah Securities
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metro and Trimegah is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Metro Healthcare Indonesia and Trimegah Securities Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Securities 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 Trimegah Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Securities Tbk has no effect on the direction of Metro Healthcare i.e., Metro Healthcare and Trimegah Securities go up and down completely randomly.
Pair Corralation between Metro Healthcare and Trimegah Securities
Assuming the 90 days trading horizon Metro Healthcare Indonesia is expected to generate 1.62 times more return on investment than Trimegah Securities. However, Metro Healthcare is 1.62 times more volatile than Trimegah Securities Tbk. It trades about 0.05 of its potential returns per unit of risk. Trimegah Securities Tbk is currently generating about 0.04 per unit of risk. If you would invest 16,600 in Metro Healthcare Indonesia on December 11, 2024 and sell it today you would earn a total of 4,600 from holding Metro Healthcare Indonesia or generate 27.71% 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. Trimegah Securities Tbk
Performance |
| Timeline |
| Metro Healthcare Ind |
| Trimegah Securities Tbk |
Metro Healthcare and Trimegah Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Healthcare and Trimegah Securities
The main advantage of trading using opposite Metro Healthcare and Trimegah Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Healthcare position performs unexpectedly, Trimegah Securities 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 Trimegah Securities will offset losses from the drop in Trimegah Securities' long position.| Metro Healthcare vs. Medikaloka Hermina PT | ||
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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