Correlation Between Digital Mediatama and Erajaya Swasembada
Can any of the company-specific risk be diversified away by investing in both Digital Mediatama and Erajaya Swasembada 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 Erajaya Swasembada 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 Erajaya Swasembada Tbk, you can compare the effects of market volatilities on Digital Mediatama and Erajaya Swasembada 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 Erajaya Swasembada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Mediatama and Erajaya Swasembada.
Diversification Opportunities for Digital Mediatama and Erajaya Swasembada
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digital and Erajaya is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Digital Mediatama Maxima and Erajaya Swasembada Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erajaya Swasembada 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 Erajaya Swasembada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erajaya Swasembada Tbk has no effect on the direction of Digital Mediatama i.e., Digital Mediatama and Erajaya Swasembada go up and down completely randomly.
Pair Corralation between Digital Mediatama and Erajaya Swasembada
Assuming the 90 days trading horizon Digital Mediatama Maxima is expected to generate 3.15 times more return on investment than Erajaya Swasembada. However, Digital Mediatama is 3.15 times more volatile than Erajaya Swasembada Tbk. It trades about 0.18 of its potential returns per unit of risk. Erajaya Swasembada Tbk is currently generating about -0.07 per unit of risk. If you would invest 18,100 in Digital Mediatama Maxima on August 29, 2024 and sell it today you would earn a total of 4,900 from holding Digital Mediatama Maxima or generate 27.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Mediatama Maxima vs. Erajaya Swasembada Tbk
Performance |
| Timeline |
| Digital Mediatama Maxima |
| Erajaya Swasembada Tbk |
Digital Mediatama and Erajaya Swasembada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Mediatama and Erajaya Swasembada
The main advantage of trading using opposite Digital Mediatama and Erajaya Swasembada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Mediatama position performs unexpectedly, Erajaya Swasembada 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 Erajaya Swasembada will offset losses from the drop in Erajaya Swasembada'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 |
| Erajaya Swasembada vs. M Cash Integrasi | Erajaya Swasembada vs. NFC Indonesia PT | Erajaya Swasembada vs. Multipolar Technology Tbk | Erajaya Swasembada 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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