Correlation Between Metrodata Electronics and Era Media
Can any of the company-specific risk be diversified away by investing in both Metrodata Electronics and Era Media 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 Metrodata Electronics and Era Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metrodata Electronics Tbk and Era Media Sejahtera, you can compare the effects of market volatilities on Metrodata Electronics and Era Media 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 Metrodata Electronics with a short position of Era Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrodata Electronics and Era Media.
Diversification Opportunities for Metrodata Electronics and Era Media
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metrodata and Era is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Metrodata Electronics Tbk and Era Media Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Media Sejahtera and Metrodata Electronics 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 Metrodata Electronics Tbk are associated (or correlated) with Era Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Media Sejahtera has no effect on the direction of Metrodata Electronics i.e., Metrodata Electronics and Era Media go up and down completely randomly.
Pair Corralation between Metrodata Electronics and Era Media
Assuming the 90 days trading horizon Metrodata Electronics Tbk is expected to generate 1.11 times more return on investment than Era Media. However, Metrodata Electronics is 1.11 times more volatile than Era Media Sejahtera. It trades about 0.07 of its potential returns per unit of risk. Era Media Sejahtera is currently generating about 0.03 per unit of risk. If you would invest 53,937 in Metrodata Electronics Tbk on September 3, 2024 and sell it today you would earn a total of 8,063 from holding Metrodata Electronics Tbk or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metrodata Electronics Tbk vs. Era Media Sejahtera
Performance |
| Timeline |
| Metrodata Electronics Tbk |
| Era Media Sejahtera |
Metrodata Electronics and Era Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrodata Electronics and Era Media
The main advantage of trading using opposite Metrodata Electronics and Era Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrodata Electronics position performs unexpectedly, Era Media 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 Era Media will offset losses from the drop in Era Media's long position.| Metrodata Electronics vs. Astra Graphia Tbk | Metrodata Electronics vs. Mitra Pinasthika Mustika | Metrodata Electronics vs. Jakarta Int Hotels | Metrodata Electronics vs. Asuransi Harta Aman |
| Era Media vs. Chandra Asri Petrochemical | Era Media vs. Bank Negara Indonesia | Era Media vs. Sumber Alfaria Trijaya | Era Media vs. Mitra Pinasthika Mustika |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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