Correlation Between Metrodata Electronics and Gajah Tunggal
Can any of the company-specific risk be diversified away by investing in both Metrodata Electronics and Gajah Tunggal 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 Gajah Tunggal 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 Gajah Tunggal Tbk, you can compare the effects of market volatilities on Metrodata Electronics and Gajah Tunggal 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 Gajah Tunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrodata Electronics and Gajah Tunggal.
Diversification Opportunities for Metrodata Electronics and Gajah Tunggal
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Metrodata and Gajah is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Metrodata Electronics Tbk and Gajah Tunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gajah Tunggal Tbk 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 Gajah Tunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gajah Tunggal Tbk has no effect on the direction of Metrodata Electronics i.e., Metrodata Electronics and Gajah Tunggal go up and down completely randomly.
Pair Corralation between Metrodata Electronics and Gajah Tunggal
Assuming the 90 days trading horizon Metrodata Electronics is expected to generate 2.21 times less return on investment than Gajah Tunggal. But when comparing it to its historical volatility, Metrodata Electronics Tbk is 2.09 times less risky than Gajah Tunggal. It trades about 0.04 of its potential returns per unit of risk. Gajah Tunggal Tbk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 80,021 in Gajah Tunggal Tbk on August 27, 2024 and sell it today you would earn a total of 33,979 from holding Gajah Tunggal Tbk or generate 42.46% 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. Gajah Tunggal Tbk
Performance |
| Timeline |
| Metrodata Electronics Tbk |
| Gajah Tunggal Tbk |
Metrodata Electronics and Gajah Tunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrodata Electronics and Gajah Tunggal
The main advantage of trading using opposite Metrodata Electronics and Gajah Tunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrodata Electronics position performs unexpectedly, Gajah Tunggal 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 Gajah Tunggal will offset losses from the drop in Gajah Tunggal's long position.| Metrodata Electronics vs. Multipolar Tbk | Metrodata Electronics vs. Astra Graphia Tbk | Metrodata Electronics vs. Matahari Putra Prima | Metrodata Electronics vs. Ramayana Lestari Sentosa |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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