Correlation Between Arkadia Digital and Electronic City
Can any of the company-specific risk be diversified away by investing in both Arkadia Digital and Electronic City 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 Arkadia Digital and Electronic City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arkadia Digital Media and Electronic City Indonesia, you can compare the effects of market volatilities on Arkadia Digital and Electronic City 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 Arkadia Digital with a short position of Electronic City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arkadia Digital and Electronic City.
Diversification Opportunities for Arkadia Digital and Electronic City
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arkadia and Electronic is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Arkadia Digital Media and Electronic City Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic City Indonesia and Arkadia Digital 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 Arkadia Digital Media are associated (or correlated) with Electronic City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic City Indonesia has no effect on the direction of Arkadia Digital i.e., Arkadia Digital and Electronic City go up and down completely randomly.
Pair Corralation between Arkadia Digital and Electronic City
Assuming the 90 days trading horizon Arkadia Digital is expected to generate 3.92 times less return on investment than Electronic City. But when comparing it to its historical volatility, Arkadia Digital Media is 2.83 times less risky than Electronic City. It trades about 0.01 of its potential returns per unit of risk. Electronic City Indonesia is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 22,400 in Electronic City Indonesia on August 27, 2024 and sell it today you would lose (600.00) from holding Electronic City Indonesia or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arkadia Digital Media vs. Electronic City Indonesia
Performance |
| Timeline |
| Arkadia Digital Media |
| Electronic City Indonesia |
Arkadia Digital and Electronic City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arkadia Digital and Electronic City
The main advantage of trading using opposite Arkadia Digital and Electronic City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arkadia Digital position performs unexpectedly, Electronic City 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 Electronic City will offset losses from the drop in Electronic City's long position.| Arkadia Digital vs. Electronic City Indonesia | Arkadia Digital vs. MD Pictures Tbk | Arkadia Digital vs. Bintang Oto Global | Arkadia Digital vs. Graha Layar Prima |
| Electronic City vs. Catur Sentosa Adiprana | Electronic City vs. Fast Food Indonesia | Electronic City vs. Hero Supermarket Tbk | Electronic City vs. Graha Layar Prima |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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