Correlation Between Digital Mediatama and Berkah Prima
Can any of the company-specific risk be diversified away by investing in both Digital Mediatama and Berkah Prima 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 Digital Mediatama and Berkah Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Mediatama Maxima and Berkah Prima Perkasa, you can compare the effects of market volatilities on Digital Mediatama and Berkah Prima 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 Digital Mediatama with a short position of Berkah Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Mediatama and Berkah Prima.
Diversification Opportunities for Digital Mediatama and Berkah Prima
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Digital and Berkah is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Digital Mediatama Maxima and Berkah Prima Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkah Prima Perkasa and Digital Mediatama 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 Digital Mediatama Maxima are associated (or correlated) with Berkah Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkah Prima Perkasa has no effect on the direction of Digital Mediatama i.e., Digital Mediatama and Berkah Prima go up and down completely randomly.
Pair Corralation between Digital Mediatama and Berkah Prima
Assuming the 90 days trading horizon Digital Mediatama Maxima is expected to generate 3.93 times more return on investment than Berkah Prima. However, Digital Mediatama is 3.93 times more volatile than Berkah Prima Perkasa. It trades about 0.11 of its potential returns per unit of risk. Berkah Prima Perkasa is currently generating about 0.05 per unit of risk. If you would invest 14,000 in Digital Mediatama Maxima on September 3, 2024 and sell it today you would earn a total of 9,200 from holding Digital Mediatama Maxima or generate 65.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Mediatama Maxima vs. Berkah Prima Perkasa
Performance |
| Timeline |
| Digital Mediatama Maxima |
| Berkah Prima Perkasa |
Digital Mediatama and Berkah Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Mediatama and Berkah Prima
The main advantage of trading using opposite Digital Mediatama and Berkah Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Mediatama position performs unexpectedly, Berkah Prima 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 Berkah Prima will offset losses from the drop in Berkah Prima's long position.| Digital Mediatama vs. Elang Mahkota Teknologi | Digital Mediatama vs. Bank Artos Indonesia | Digital Mediatama vs. Bank Yudha Bhakti | Digital Mediatama vs. NFC Indonesia PT |
| Berkah Prima vs. Multipolar Technology Tbk | Berkah Prima vs. Hensel Davest Indonesia | Berkah Prima vs. Anabatic Technologies Tbk | Berkah Prima vs. Digital Mediatama Maxima |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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