Correlation Between Metrodata Electronics and Pertamina Geothermal
Can any of the company-specific risk be diversified away by investing in both Metrodata Electronics and Pertamina Geothermal 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 Pertamina Geothermal 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 Pertamina Geothermal Energy, you can compare the effects of market volatilities on Metrodata Electronics and Pertamina Geothermal 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 Pertamina Geothermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrodata Electronics and Pertamina Geothermal.
Diversification Opportunities for Metrodata Electronics and Pertamina Geothermal
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metrodata and Pertamina is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Metrodata Electronics Tbk and Pertamina Geothermal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pertamina Geothermal 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 Pertamina Geothermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pertamina Geothermal has no effect on the direction of Metrodata Electronics i.e., Metrodata Electronics and Pertamina Geothermal go up and down completely randomly.
Pair Corralation between Metrodata Electronics and Pertamina Geothermal
Assuming the 90 days trading horizon Metrodata Electronics Tbk is expected to under-perform the Pertamina Geothermal. But the stock apears to be less risky and, when comparing its historical volatility, Metrodata Electronics Tbk is 2.06 times less risky than Pertamina Geothermal. The stock trades about -0.29 of its potential returns per unit of risk. The Pertamina Geothermal Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 94,000 in Pertamina Geothermal Energy on November 3, 2024 and sell it today you would earn a total of 2,000 from holding Pertamina Geothermal Energy or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metrodata Electronics Tbk vs. Pertamina Geothermal Energy
Performance |
| Timeline |
| Metrodata Electronics Tbk |
| Pertamina Geothermal |
Metrodata Electronics and Pertamina Geothermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrodata Electronics and Pertamina Geothermal
The main advantage of trading using opposite Metrodata Electronics and Pertamina Geothermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrodata Electronics position performs unexpectedly, Pertamina Geothermal 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 Pertamina Geothermal will offset losses from the drop in Pertamina Geothermal'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 |
| Pertamina Geothermal vs. Bank Ocbc Nisp | Pertamina Geothermal vs. Weha Transportasi Indonesia | Pertamina Geothermal vs. Wintermar Offshore Marine |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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