Correlation Between Meta Epsi and Asuransi Bintang

Can any of the company-specific risk be diversified away by investing in both Meta Epsi and Asuransi Bintang 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 Meta Epsi and Asuransi Bintang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Meta Epsi Tbk and Asuransi Bintang Tbk, you can compare the effects of market volatilities on Meta Epsi and Asuransi Bintang 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 Meta Epsi with a short position of Asuransi Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Epsi and Asuransi Bintang.

Diversification Opportunities for Meta Epsi and Asuransi Bintang

0.0

Correlation Coefficient

Meta Epsi  Asuransi Bintang

Pay attention - limited upside

The 3 months correlation between Meta and Asuransi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Meta Epsi Tbk and Asuransi Bintang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Bintang Tbk and Meta Epsi 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 Meta Epsi Tbk are associated (or correlated) with Asuransi Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Bintang Tbk has no effect on the direction of Meta Epsi i.e., Meta Epsi and Asuransi Bintang go up and down completely randomly.

Pair Corralation between Meta Epsi and Asuransi Bintang

If you would invest  78,500  in Asuransi Bintang Tbk on January 28, 2024 and sell it today you would earn a total of  6,500  from holding Asuransi Bintang Tbk or generate 8.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Meta Epsi Tbk  vs.  Asuransi Bintang Tbk

Meta Epsi Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meta Epsi Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Meta Epsi is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Asuransi Bintang Tbk

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asuransi Bintang Tbk are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Asuransi Bintang disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meta Epsi and Asuransi Bintang

The main advantage of trading using opposite Meta Epsi and Asuransi Bintang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Epsi position performs unexpectedly, Asuransi Bintang 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 Asuransi Bintang will offset losses from the drop in Asuransi Bintang's long position.

The idea behind Meta Epsi Tbk and Asuransi Bintang Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.