Correlation Between City Retail and Metro Healthcare
Can any of the company-specific risk be diversified away by investing in both City Retail and Metro Healthcare 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 City Retail and Metro Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City Retail Developments and Metro Healthcare Indonesia, you can compare the effects of market volatilities on City Retail and Metro Healthcare 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 City Retail with a short position of Metro Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Retail and Metro Healthcare.
Diversification Opportunities for City Retail and Metro Healthcare
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between City and Metro is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding City Retail Developments and Metro Healthcare Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Healthcare Ind and City Retail 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 City Retail Developments are associated (or correlated) with Metro Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Healthcare Ind has no effect on the direction of City Retail i.e., City Retail and Metro Healthcare go up and down completely randomly.
Pair Corralation between City Retail and Metro Healthcare
Assuming the 90 days trading horizon City Retail Developments is expected to generate 0.18 times more return on investment than Metro Healthcare. However, City Retail Developments is 5.45 times less risky than Metro Healthcare. It trades about -0.02 of its potential returns per unit of risk. Metro Healthcare Indonesia is currently generating about -0.03 per unit of risk. If you would invest 14,800 in City Retail Developments on September 3, 2024 and sell it today you would lose (1,300) from holding City Retail Developments or give up 8.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Retail Developments vs. Metro Healthcare Indonesia
Performance |
| Timeline |
| City Retail Developments |
| Metro Healthcare Ind |
City Retail and Metro Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Retail and Metro Healthcare
The main advantage of trading using opposite City Retail and Metro Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Retail position performs unexpectedly, Metro Healthcare 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 Metro Healthcare will offset losses from the drop in Metro Healthcare's long position.| City Retail vs. Mitra Pinasthika Mustika | City Retail vs. Jakarta Int Hotels | City Retail vs. Asuransi Harta Aman | City Retail vs. Indosterling Technomedia Tbk |
| Metro Healthcare vs. Medikaloka Hermina PT | Metro Healthcare vs. Mitra Keluarga Karyasehat | Metro Healthcare vs. Mitra Pinasthika Mustika | Metro Healthcare vs. Jakarta Int Hotels |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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