Correlation Between PT Global and MOVIE GAMES
Can any of the company-specific risk be diversified away by investing in both PT Global and MOVIE GAMES 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 Global and MOVIE GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Global Mediacom and MOVIE GAMES SA, you can compare the effects of market volatilities on PT Global and MOVIE GAMES 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 Global with a short position of MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Global and MOVIE GAMES.
Diversification Opportunities for PT Global and MOVIE GAMES
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 06L and MOVIE is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding PT Global Mediacom and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA and PT Global 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 Global Mediacom are associated (or correlated) with MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of PT Global i.e., PT Global and MOVIE GAMES go up and down completely randomly.
Pair Corralation between PT Global and MOVIE GAMES
Assuming the 90 days trading horizon PT Global Mediacom is expected to generate 3.06 times more return on investment than MOVIE GAMES. However, PT Global is 3.06 times more volatile than MOVIE GAMES SA. It trades about 0.02 of its potential returns per unit of risk. MOVIE GAMES SA is currently generating about 0.0 per unit of risk. If you would invest 1.45 in PT Global Mediacom on August 31, 2024 and sell it today you would lose (0.70) from holding PT Global Mediacom or give up 48.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Global Mediacom vs. MOVIE GAMES SA
Performance |
| Timeline |
| PT Global Mediacom |
| MOVIE GAMES SA |
PT Global and MOVIE GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Global and MOVIE GAMES
The main advantage of trading using opposite PT Global and MOVIE GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Global position performs unexpectedly, MOVIE GAMES 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 MOVIE GAMES will offset losses from the drop in MOVIE GAMES's long position.| PT Global vs. Netflix | PT Global vs. Warner Music Group | PT Global vs. Superior Plus Corp | PT Global vs. NMI Holdings |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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