Correlation Between METTLER TOLEDO and BAKRIE SUMATERA
Can any of the company-specific risk be diversified away by investing in both METTLER TOLEDO and BAKRIE SUMATERA 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 METTLER TOLEDO and BAKRIE SUMATERA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METTLER TOLEDO INTL and BAKRIE SUMATERA PL, you can compare the effects of market volatilities on METTLER TOLEDO and BAKRIE SUMATERA 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 METTLER TOLEDO with a short position of BAKRIE SUMATERA. Check out your portfolio center. Please also check ongoing floating volatility patterns of METTLER TOLEDO and BAKRIE SUMATERA.
Diversification Opportunities for METTLER TOLEDO and BAKRIE SUMATERA
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between METTLER and BAKRIE is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL and BAKRIE SUMATERA PL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKRIE SUMATERA PL and METTLER TOLEDO 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 METTLER TOLEDO INTL are associated (or correlated) with BAKRIE SUMATERA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKRIE SUMATERA PL has no effect on the direction of METTLER TOLEDO i.e., METTLER TOLEDO and BAKRIE SUMATERA go up and down completely randomly.
Pair Corralation between METTLER TOLEDO and BAKRIE SUMATERA
Assuming the 90 days trading horizon METTLER TOLEDO INTL is expected to under-perform the BAKRIE SUMATERA. But the stock apears to be less risky and, when comparing its historical volatility, METTLER TOLEDO INTL is 2.4 times less risky than BAKRIE SUMATERA. The stock trades about -0.02 of its potential returns per unit of risk. The BAKRIE SUMATERA PL is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.15 in BAKRIE SUMATERA PL on September 2, 2024 and sell it today you would earn a total of 0.05 from holding BAKRIE SUMATERA PL or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
METTLER TOLEDO INTL vs. BAKRIE SUMATERA PL
Performance |
| Timeline |
| METTLER TOLEDO INTL |
| BAKRIE SUMATERA PL |
METTLER TOLEDO and BAKRIE SUMATERA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METTLER TOLEDO and BAKRIE SUMATERA
The main advantage of trading using opposite METTLER TOLEDO and BAKRIE SUMATERA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METTLER TOLEDO position performs unexpectedly, BAKRIE SUMATERA 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 BAKRIE SUMATERA will offset losses from the drop in BAKRIE SUMATERA's long position.| METTLER TOLEDO vs. Compagnie Plastic Omnium | METTLER TOLEDO vs. NEWELL RUBBERMAID | METTLER TOLEDO vs. Goodyear Tire Rubber | METTLER TOLEDO vs. Entravision Communications |
| BAKRIE SUMATERA vs. Thai Beverage Public | BAKRIE SUMATERA vs. Luckin Coffee | BAKRIE SUMATERA vs. ULTRA CLEAN HLDGS | BAKRIE SUMATERA vs. VARIOUS EATERIES LS |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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