Correlation Between Metro Healthcare and Verena Multi
Can any of the company-specific risk be diversified away by investing in both Metro Healthcare and Verena Multi 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 Verena Multi 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 Verena Multi Finance, you can compare the effects of market volatilities on Metro Healthcare and Verena Multi 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 Verena Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Healthcare and Verena Multi.
Diversification Opportunities for Metro Healthcare and Verena Multi
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metro and Verena is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Metro Healthcare Indonesia and Verena Multi Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verena Multi Finance 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 Verena Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verena Multi Finance has no effect on the direction of Metro Healthcare i.e., Metro Healthcare and Verena Multi go up and down completely randomly.
Pair Corralation between Metro Healthcare and Verena Multi
Assuming the 90 days trading horizon Metro Healthcare Indonesia is expected to under-perform the Verena Multi. In addition to that, Metro Healthcare is 2.16 times more volatile than Verena Multi Finance. It trades about -0.03 of its total potential returns per unit of risk. Verena Multi Finance is currently generating about -0.02 per unit of volatility. If you would invest 11,700 in Verena Multi Finance on August 27, 2024 and sell it today you would lose (2,800) from holding Verena Multi Finance or give up 23.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Healthcare Indonesia vs. Verena Multi Finance
Performance |
| Timeline |
| Metro Healthcare Ind |
| Verena Multi Finance |
Metro Healthcare and Verena Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Healthcare and Verena Multi
The main advantage of trading using opposite Metro Healthcare and Verena Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Healthcare position performs unexpectedly, Verena Multi 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 Verena Multi will offset losses from the drop in Verena Multi'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 |
| Verena Multi vs. Paninvest Tbk | Verena Multi vs. Wahana Ottomitra Multiartha | Verena Multi vs. Lenox Pasifik Investama |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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