Correlation Between Digital Mediatama and Pabrik Kertas
Can any of the company-specific risk be diversified away by investing in both Digital Mediatama and Pabrik Kertas 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 Pabrik Kertas 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 Pabrik Kertas Tjiwi, you can compare the effects of market volatilities on Digital Mediatama and Pabrik Kertas 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 Pabrik Kertas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Mediatama and Pabrik Kertas.
Diversification Opportunities for Digital Mediatama and Pabrik Kertas
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Digital and Pabrik is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Digital Mediatama Maxima and Pabrik Kertas Tjiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pabrik Kertas Tjiwi 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 Pabrik Kertas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pabrik Kertas Tjiwi has no effect on the direction of Digital Mediatama i.e., Digital Mediatama and Pabrik Kertas go up and down completely randomly.
Pair Corralation between Digital Mediatama and Pabrik Kertas
Assuming the 90 days trading horizon Digital Mediatama Maxima is expected to under-perform the Pabrik Kertas. In addition to that, Digital Mediatama is 2.01 times more volatile than Pabrik Kertas Tjiwi. It trades about -0.03 of its total potential returns per unit of risk. Pabrik Kertas Tjiwi is currently generating about 0.02 per unit of volatility. If you would invest 578,319 in Pabrik Kertas Tjiwi on August 27, 2024 and sell it today you would earn a total of 44,181 from holding Pabrik Kertas Tjiwi or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Digital Mediatama Maxima vs. Pabrik Kertas Tjiwi
Performance |
| Timeline |
| Digital Mediatama Maxima |
| Pabrik Kertas Tjiwi |
Digital Mediatama and Pabrik Kertas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Mediatama and Pabrik Kertas
The main advantage of trading using opposite Digital Mediatama and Pabrik Kertas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Mediatama position performs unexpectedly, Pabrik Kertas 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 Pabrik Kertas will offset losses from the drop in Pabrik Kertas' 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 |
| Pabrik Kertas vs. Indah Kiat Pulp | Pabrik Kertas vs. Indocement Tunggal Prakarsa | Pabrik Kertas vs. Barito Pacific Tbk | Pabrik Kertas vs. Charoen Pokphand 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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