Correlation Between Metro Healthcare and Aesler Grup
Can any of the company-specific risk be diversified away by investing in both Metro Healthcare and Aesler Grup 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 Metro Healthcare and Aesler Grup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Healthcare Indonesia and Aesler Grup Internasional, you can compare the effects of market volatilities on Metro Healthcare and Aesler Grup 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 Metro Healthcare with a short position of Aesler Grup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Healthcare and Aesler Grup.
Diversification Opportunities for Metro Healthcare and Aesler Grup
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metro and Aesler is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Metro Healthcare Indonesia and Aesler Grup Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesler Grup Internasional and Metro Healthcare 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 Metro Healthcare Indonesia are associated (or correlated) with Aesler Grup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesler Grup Internasional has no effect on the direction of Metro Healthcare i.e., Metro Healthcare and Aesler Grup go up and down completely randomly.
Pair Corralation between Metro Healthcare and Aesler Grup
Assuming the 90 days trading horizon Metro Healthcare is expected to generate 3.34 times less return on investment than Aesler Grup. But when comparing it to its historical volatility, Metro Healthcare Indonesia is 1.58 times less risky than Aesler Grup. It trades about 0.36 of its potential returns per unit of risk. Aesler Grup Internasional is currently generating about 0.77 of returns per unit of risk over similar time horizon. If you would invest 16,500 in Aesler Grup Internasional on September 18, 2024 and sell it today you would earn a total of 130,000 from holding Aesler Grup Internasional or generate 787.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Metro Healthcare Indonesia vs. Aesler Grup Internasional
Performance |
Timeline |
Metro Healthcare Ind |
Aesler Grup Internasional |
Metro Healthcare and Aesler Grup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Metro Healthcare and Aesler Grup
The main advantage of trading using opposite Metro Healthcare and Aesler Grup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Healthcare position performs unexpectedly, Aesler Grup 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 Aesler Grup will offset losses from the drop in Aesler Grup's long position.Metro Healthcare vs. Medikaloka Hermina PT | Metro Healthcare vs. Sarana Meditama Metropolitan | Metro Healthcare vs. Mitra Keluarga Karyasehat | Metro Healthcare vs. Surya Permata Andalan |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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