Correlation Between Digital Mediatama and Itama Ranoraya
Can any of the company-specific risk be diversified away by investing in both Digital Mediatama and Itama Ranoraya 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 Itama Ranoraya 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 Itama Ranoraya, you can compare the effects of market volatilities on Digital Mediatama and Itama Ranoraya 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 Itama Ranoraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Mediatama and Itama Ranoraya.
Diversification Opportunities for Digital Mediatama and Itama Ranoraya
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Digital and Itama is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Digital Mediatama Maxima and Itama Ranoraya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itama Ranoraya 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 Itama Ranoraya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itama Ranoraya has no effect on the direction of Digital Mediatama i.e., Digital Mediatama and Itama Ranoraya go up and down completely randomly.
Pair Corralation between Digital Mediatama and Itama Ranoraya
Assuming the 90 days trading horizon Digital Mediatama Maxima is expected to generate 4.9 times more return on investment than Itama Ranoraya. However, Digital Mediatama is 4.9 times more volatile than Itama Ranoraya. It trades about -0.04 of its potential returns per unit of risk. Itama Ranoraya is currently generating about -0.48 per unit of risk. If you would invest 23,400 in Digital Mediatama Maxima on September 1, 2024 and sell it today you would lose (1,400) from holding Digital Mediatama Maxima or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Digital Mediatama Maxima vs. Itama Ranoraya
Performance |
| Timeline |
| Digital Mediatama Maxima |
| Itama Ranoraya |
Digital Mediatama and Itama Ranoraya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Mediatama and Itama Ranoraya
The main advantage of trading using opposite Digital Mediatama and Itama Ranoraya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Mediatama position performs unexpectedly, Itama Ranoraya 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 Itama Ranoraya will offset losses from the drop in Itama Ranoraya'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 |
| Itama Ranoraya vs. Kimia Farma Persero | Itama Ranoraya vs. Indofarma Tbk | Itama Ranoraya vs. Bank BRISyariah Tbk | Itama Ranoraya vs. Bank Rakyat Indonesia |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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