Correlation Between Global Mediacom and First Media
Can any of the company-specific risk be diversified away by investing in both Global Mediacom and First Media 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 Global Mediacom and First Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Mediacom Tbk and First Media Tbk, you can compare the effects of market volatilities on Global Mediacom and First Media 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 Global Mediacom with a short position of First Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Mediacom and First Media.
Diversification Opportunities for Global Mediacom and First Media
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and First is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Global Mediacom Tbk and First Media Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Media Tbk and Global Mediacom 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 Global Mediacom Tbk are associated (or correlated) with First Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Media Tbk has no effect on the direction of Global Mediacom i.e., Global Mediacom and First Media go up and down completely randomly.
Pair Corralation between Global Mediacom and First Media
Assuming the 90 days trading horizon Global Mediacom Tbk is expected to under-perform the First Media. But the stock apears to be less risky and, when comparing its historical volatility, Global Mediacom Tbk is 1.85 times less risky than First Media. The stock trades about -0.22 of its potential returns per unit of risk. The First Media Tbk is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 8,000 in First Media Tbk on August 30, 2024 and sell it today you would earn a total of 1,800 from holding First Media Tbk or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Mediacom Tbk vs. First Media Tbk
Performance |
| Timeline |
| Global Mediacom Tbk |
| First Media Tbk |
Global Mediacom and First Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Mediacom and First Media
The main advantage of trading using opposite Global Mediacom and First Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Mediacom position performs unexpectedly, First Media 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 First Media will offset losses from the drop in First Media's long position.| Global Mediacom vs. Media Nusantara Citra | Global Mediacom vs. Mnc Investama Tbk | Global Mediacom vs. Akr Corporindo Tbk | Global Mediacom vs. Ciputra Development Tbk |
| First Media vs. Bank Artos Indonesia | First Media vs. PT Bukalapak | First Media vs. Sumber Alfaria Trijaya | First Media vs. Merdeka Copper Gold |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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