Correlation Between PT Verona and Metro Healthcare
Can any of the company-specific risk be diversified away by investing in both PT Verona 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 PT Verona and Metro Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Verona Indah and Metro Healthcare Indonesia, you can compare the effects of market volatilities on PT Verona 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 PT Verona with a short position of Metro Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Verona and Metro Healthcare.
Diversification Opportunities for PT Verona and Metro Healthcare
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VERN and Metro is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PT Verona Indah 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 PT Verona 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 PT Verona Indah 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 PT Verona i.e., PT Verona and Metro Healthcare go up and down completely randomly.
Pair Corralation between PT Verona and Metro Healthcare
Assuming the 90 days trading horizon PT Verona Indah is expected to under-perform the Metro Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, PT Verona Indah is 1.21 times less risky than Metro Healthcare. The stock trades about -0.33 of its potential returns per unit of risk. The Metro Healthcare Indonesia is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 13,000 in Metro Healthcare Indonesia on August 31, 2024 and sell it today you would earn a total of 3,800 from holding Metro Healthcare Indonesia or generate 29.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PT Verona Indah vs. Metro Healthcare Indonesia
Performance |
| Timeline |
| PT Verona Indah |
| Metro Healthcare Ind |
PT Verona and Metro Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Verona and Metro Healthcare
The main advantage of trading using opposite PT Verona and Metro Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Verona 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.| PT Verona vs. Metro Healthcare Indonesia | PT Verona vs. PT Jobubu Jarum | PT Verona vs. Metrodata Electronics Tbk | PT Verona vs. Prima Alloy Steel |
| Metro Healthcare vs. Medikaloka Hermina PT | Metro Healthcare vs. Sarana Meditama Metropolitan | Metro Healthcare vs. Mitra Keluarga Karyasehat | Metro Healthcare vs. Bhakti Multi Artha |
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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