Correlation Between Metrodata Electronics and Indo Acidatama
Can any of the company-specific risk be diversified away by investing in both Metrodata Electronics and Indo Acidatama 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 Indo Acidatama 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 Indo Acidatama Tbk, you can compare the effects of market volatilities on Metrodata Electronics and Indo Acidatama 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 Indo Acidatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrodata Electronics and Indo Acidatama.
Diversification Opportunities for Metrodata Electronics and Indo Acidatama
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Metrodata and Indo is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Metrodata Electronics Tbk and Indo Acidatama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Acidatama 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 Indo Acidatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Acidatama Tbk has no effect on the direction of Metrodata Electronics i.e., Metrodata Electronics and Indo Acidatama go up and down completely randomly.
Pair Corralation between Metrodata Electronics and Indo Acidatama
Assuming the 90 days trading horizon Metrodata Electronics is expected to generate 1.07 times less return on investment than Indo Acidatama. But when comparing it to its historical volatility, Metrodata Electronics Tbk is 1.04 times less risky than Indo Acidatama. It trades about 0.01 of its potential returns per unit of risk. Indo Acidatama Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,804 in Indo Acidatama Tbk on November 5, 2024 and sell it today you would earn a total of 196.00 from holding Indo Acidatama Tbk or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Metrodata Electronics Tbk vs. Indo Acidatama Tbk
Performance |
| Timeline |
| Metrodata Electronics Tbk |
| Indo Acidatama Tbk |
Metrodata Electronics and Indo Acidatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrodata Electronics and Indo Acidatama
The main advantage of trading using opposite Metrodata Electronics and Indo Acidatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrodata Electronics position performs unexpectedly, Indo Acidatama 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 Indo Acidatama will offset losses from the drop in Indo Acidatama'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 |
| Indo Acidatama vs. PT Sreeya Sewu | Indo Acidatama vs. Trias Sentosa Tbk | Indo Acidatama vs. Slj Global Tbk | Indo Acidatama vs. Suparma Tbk |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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