Correlation Between DCI Indonesia and Digital Mediatama
Can any of the company-specific risk be diversified away by investing in both DCI Indonesia and Digital Mediatama 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 DCI Indonesia and Digital Mediatama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DCI Indonesia Tbk and Digital Mediatama Maxima, you can compare the effects of market volatilities on DCI Indonesia and Digital Mediatama 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 DCI Indonesia with a short position of Digital Mediatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of DCI Indonesia and Digital Mediatama.
Diversification Opportunities for DCI Indonesia and Digital Mediatama
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DCI and Digital is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding DCI Indonesia Tbk and Digital Mediatama Maxima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Mediatama Maxima and DCI Indonesia 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 DCI Indonesia Tbk are associated (or correlated) with Digital Mediatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Mediatama Maxima has no effect on the direction of DCI Indonesia i.e., DCI Indonesia and Digital Mediatama go up and down completely randomly.
Pair Corralation between DCI Indonesia and Digital Mediatama
Assuming the 90 days trading horizon DCI Indonesia Tbk is expected to generate 0.54 times more return on investment than Digital Mediatama. However, DCI Indonesia Tbk is 1.85 times less risky than Digital Mediatama. It trades about -0.05 of its potential returns per unit of risk. Digital Mediatama Maxima is currently generating about -0.16 per unit of risk. If you would invest 4,210,000 in DCI Indonesia Tbk on October 22, 2024 and sell it today you would lose (87,500) from holding DCI Indonesia Tbk or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
DCI Indonesia Tbk vs. Digital Mediatama Maxima
Performance |
| Timeline |
| DCI Indonesia Tbk |
| Digital Mediatama Maxima |
DCI Indonesia and Digital Mediatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DCI Indonesia and Digital Mediatama
The main advantage of trading using opposite DCI Indonesia and Digital Mediatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DCI Indonesia position performs unexpectedly, Digital Mediatama 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 Digital Mediatama will offset losses from the drop in Digital Mediatama's long position.| DCI Indonesia vs. Bank Artos Indonesia | DCI Indonesia vs. Elang Mahkota Teknologi | DCI Indonesia vs. Indointernet Tbk PT | DCI Indonesia vs. PT Bukalapak |
| Digital Mediatama vs. Elang Mahkota Teknologi | Digital Mediatama vs. M Cash Integrasi | Digital Mediatama vs. Bank Artos Indonesia | Digital Mediatama vs. Bank Yudha Bhakti |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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