Correlation Between Digital Mediatama and DCI Indonesia
Can any of the company-specific risk be diversified away by investing in both Digital Mediatama and DCI Indonesia 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 DCI Indonesia 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 DCI Indonesia Tbk, you can compare the effects of market volatilities on Digital Mediatama and DCI Indonesia 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 DCI Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Mediatama and DCI Indonesia.
Diversification Opportunities for Digital Mediatama and DCI Indonesia
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digital and DCI is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Digital Mediatama Maxima and DCI Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DCI Indonesia Tbk 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 DCI Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DCI Indonesia Tbk has no effect on the direction of Digital Mediatama i.e., Digital Mediatama and DCI Indonesia go up and down completely randomly.
Pair Corralation between Digital Mediatama and DCI Indonesia
Assuming the 90 days trading horizon Digital Mediatama Maxima is expected to generate 2.13 times more return on investment than DCI Indonesia. However, Digital Mediatama is 2.13 times more volatile than DCI Indonesia Tbk. It trades about 0.13 of its potential returns per unit of risk. DCI Indonesia Tbk is currently generating about 0.15 per unit of risk. If you would invest 18,900 in Digital Mediatama Maxima on August 31, 2024 and sell it today you would earn a total of 3,100 from holding Digital Mediatama Maxima or generate 16.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Mediatama Maxima vs. DCI Indonesia Tbk
Performance |
| Timeline |
| Digital Mediatama Maxima |
| DCI Indonesia Tbk |
Digital Mediatama and DCI Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Mediatama and DCI Indonesia
The main advantage of trading using opposite Digital Mediatama and DCI Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Mediatama position performs unexpectedly, DCI Indonesia 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 DCI Indonesia will offset losses from the drop in DCI Indonesia's long position.| Digital Mediatama vs. Elang Mahkota Teknologi | Digital Mediatama vs. M Cash Integrasi | Digital Mediatama vs. Bank Artos Indonesia | Digital Mediatama vs. Bank Yudha Bhakti |
| DCI Indonesia vs. Bank Artos Indonesia | DCI Indonesia vs. Elang Mahkota Teknologi | DCI Indonesia vs. Indointernet Tbk PT | DCI Indonesia vs. PT Bukalapak |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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