Correlation Between Metrodata Electronics and Bank Nationalnobu
Can any of the company-specific risk be diversified away by investing in both Metrodata Electronics and Bank Nationalnobu 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 Bank Nationalnobu 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 Bank Nationalnobu Tbk, you can compare the effects of market volatilities on Metrodata Electronics and Bank Nationalnobu 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 Bank Nationalnobu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrodata Electronics and Bank Nationalnobu.
Diversification Opportunities for Metrodata Electronics and Bank Nationalnobu
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Metrodata and Bank is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Metrodata Electronics Tbk and Bank Nationalnobu Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Nationalnobu 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 Bank Nationalnobu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Nationalnobu Tbk has no effect on the direction of Metrodata Electronics i.e., Metrodata Electronics and Bank Nationalnobu go up and down completely randomly.
Pair Corralation between Metrodata Electronics and Bank Nationalnobu
Assuming the 90 days trading horizon Metrodata Electronics is expected to generate 2.14 times less return on investment than Bank Nationalnobu. But when comparing it to its historical volatility, Metrodata Electronics Tbk is 1.72 times less risky than Bank Nationalnobu. It trades about 0.04 of its potential returns per unit of risk. Bank Nationalnobu Tbk is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 47,200 in Bank Nationalnobu Tbk on September 2, 2024 and sell it today you would earn a total of 21,300 from holding Bank Nationalnobu Tbk or generate 45.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Metrodata Electronics Tbk vs. Bank Nationalnobu Tbk
Performance |
| Timeline |
| Metrodata Electronics Tbk |
| Bank Nationalnobu Tbk |
Metrodata Electronics and Bank Nationalnobu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrodata Electronics and Bank Nationalnobu
The main advantage of trading using opposite Metrodata Electronics and Bank Nationalnobu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrodata Electronics position performs unexpectedly, Bank Nationalnobu 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 Bank Nationalnobu will offset losses from the drop in Bank Nationalnobu'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 |
| Bank Nationalnobu vs. Bank BRISyariah Tbk | Bank Nationalnobu vs. Ace Hardware Indonesia | Bank Nationalnobu vs. Merdeka Copper Gold | Bank Nationalnobu 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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