Correlation Between Hoffmen Cleanindo and Metro Healthcare
Can any of the company-specific risk be diversified away by investing in both Hoffmen Cleanindo 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 Hoffmen Cleanindo and Metro Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoffmen Cleanindo and Metro Healthcare Indonesia, you can compare the effects of market volatilities on Hoffmen Cleanindo 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 Hoffmen Cleanindo with a short position of Metro Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoffmen Cleanindo and Metro Healthcare.
Diversification Opportunities for Hoffmen Cleanindo and Metro Healthcare
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hoffmen and Metro is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hoffmen Cleanindo 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 Hoffmen Cleanindo 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 Hoffmen Cleanindo 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 Hoffmen Cleanindo i.e., Hoffmen Cleanindo and Metro Healthcare go up and down completely randomly.
Pair Corralation between Hoffmen Cleanindo and Metro Healthcare
Assuming the 90 days trading horizon Hoffmen Cleanindo is expected to generate 20.05 times less return on investment than Metro Healthcare. But when comparing it to its historical volatility, Hoffmen Cleanindo is 1.68 times less risky than Metro Healthcare. It trades about 0.04 of its potential returns per unit of risk. Metro Healthcare Indonesia is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 9,000 in Metro Healthcare Indonesia on August 30, 2024 and sell it today you would earn a total of 8,000 from holding Metro Healthcare Indonesia or generate 88.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoffmen Cleanindo vs. Metro Healthcare Indonesia
Performance |
| Timeline |
| Hoffmen Cleanindo |
| Metro Healthcare Ind |
Hoffmen Cleanindo and Metro Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoffmen Cleanindo and Metro Healthcare
The main advantage of trading using opposite Hoffmen Cleanindo and Metro Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoffmen Cleanindo 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.| Hoffmen Cleanindo vs. Surya Citra Media | Hoffmen Cleanindo vs. Indointernet Tbk PT | Hoffmen Cleanindo vs. Grand Kartech Tbk | Hoffmen Cleanindo vs. Ciptadana Asset Management |
| Metro Healthcare vs. Medikaloka Hermina PT | Metro Healthcare vs. Sarana Meditama Metropolitan | Metro Healthcare vs. Mitra Keluarga Karyasehat | Metro Healthcare vs. Bhakti Multi Artha |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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