Correlation Between Medikaloka Hermina and Metro Healthcare
Can any of the company-specific risk be diversified away by investing in both Medikaloka Hermina and Metro Healthcare 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 Medikaloka Hermina and Metro Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medikaloka Hermina PT and Metro Healthcare Indonesia, you can compare the effects of market volatilities on Medikaloka Hermina and Metro Healthcare 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 Medikaloka Hermina with a short position of Metro Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medikaloka Hermina and Metro Healthcare.
Diversification Opportunities for Medikaloka Hermina and Metro Healthcare
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Medikaloka and Metro is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Medikaloka Hermina PT and Metro Healthcare Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Healthcare Ind and Medikaloka Hermina 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 Medikaloka Hermina PT are associated (or correlated) with Metro Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Healthcare Ind has no effect on the direction of Medikaloka Hermina i.e., Medikaloka Hermina and Metro Healthcare go up and down completely randomly.
Pair Corralation between Medikaloka Hermina and Metro Healthcare
Assuming the 90 days trading horizon Medikaloka Hermina PT is expected to under-perform the Metro Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Medikaloka Hermina PT is 1.9 times less risky than Metro Healthcare. The stock trades about -0.06 of its potential returns per unit of risk. The Metro Healthcare Indonesia is currently generating about 0.45 of returns per unit of risk over similar time horizon. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medikaloka Hermina PT vs. Metro Healthcare Indonesia
Performance |
| Timeline |
| Medikaloka Hermina |
| Metro Healthcare Ind |
Medikaloka Hermina and Metro Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medikaloka Hermina and Metro Healthcare
The main advantage of trading using opposite Medikaloka Hermina and Metro Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medikaloka Hermina position performs unexpectedly, Metro Healthcare 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 Metro Healthcare will offset losses from the drop in Metro Healthcare's long position.| Medikaloka Hermina vs. Mitra Keluarga Karyasehat | Medikaloka Hermina vs. Siloam International Hospitals | Medikaloka Hermina vs. Prodia Widyahusada Tbk | Medikaloka Hermina vs. Sumber Alfaria Trijaya |
| Metro Healthcare vs. Medikaloka Hermina PT | Metro Healthcare vs. Mitra Keluarga Karyasehat | Metro Healthcare vs. Bhakti Multi Artha | Metro Healthcare vs. Surya Permata Andalan |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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