Correlation Between Humpuss Intermoda and Metrodata Electronics
Can any of the company-specific risk be diversified away by investing in both Humpuss Intermoda and Metrodata Electronics 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 Humpuss Intermoda and Metrodata Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humpuss Intermoda Transportasi and Metrodata Electronics Tbk, you can compare the effects of market volatilities on Humpuss Intermoda and Metrodata Electronics 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 Humpuss Intermoda with a short position of Metrodata Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humpuss Intermoda and Metrodata Electronics.
Diversification Opportunities for Humpuss Intermoda and Metrodata Electronics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Humpuss and Metrodata is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Humpuss Intermoda Transportasi and Metrodata Electronics Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrodata Electronics Tbk and Humpuss Intermoda 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 Humpuss Intermoda Transportasi are associated (or correlated) with Metrodata Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrodata Electronics Tbk has no effect on the direction of Humpuss Intermoda i.e., Humpuss Intermoda and Metrodata Electronics go up and down completely randomly.
Pair Corralation between Humpuss Intermoda and Metrodata Electronics
Assuming the 90 days trading horizon Humpuss Intermoda Transportasi is expected to generate 1.51 times more return on investment than Metrodata Electronics. However, Humpuss Intermoda is 1.51 times more volatile than Metrodata Electronics Tbk. It trades about 0.05 of its potential returns per unit of risk. Metrodata Electronics Tbk is currently generating about 0.07 per unit of risk. If you would invest 37,200 in Humpuss Intermoda Transportasi on September 3, 2024 and sell it today you would earn a total of 5,400 from holding Humpuss Intermoda Transportasi or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humpuss Intermoda Transportasi vs. Metrodata Electronics Tbk
Performance |
| Timeline |
| Humpuss Intermoda |
| Metrodata Electronics Tbk |
Humpuss Intermoda and Metrodata Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humpuss Intermoda and Metrodata Electronics
The main advantage of trading using opposite Humpuss Intermoda and Metrodata Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humpuss Intermoda position performs unexpectedly, Metrodata Electronics 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 Metrodata Electronics will offset losses from the drop in Metrodata Electronics' long position.| Humpuss Intermoda vs. Weha Transportasi Indonesia | Humpuss Intermoda vs. Mitra Pinasthika Mustika | Humpuss Intermoda vs. Jakarta Int Hotels | Humpuss Intermoda vs. Asuransi Harta Aman |
| Metrodata Electronics vs. Astra Graphia Tbk | Metrodata Electronics vs. Mitra Pinasthika Mustika | Metrodata Electronics vs. Jakarta Int Hotels | Metrodata Electronics vs. Asuransi Harta Aman |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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