Correlation Between PT Data and Fortune Mate
Can any of the company-specific risk be diversified away by investing in both PT Data and Fortune Mate 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 PT Data and Fortune Mate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Data Sinergitama and Fortune Mate Indonesia, you can compare the effects of market volatilities on PT Data and Fortune Mate 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 PT Data with a short position of Fortune Mate. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Data and Fortune Mate.
Diversification Opportunities for PT Data and Fortune Mate
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ELIT and Fortune is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama and Fortune Mate Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Mate Indonesia and PT Data 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 PT Data Sinergitama are associated (or correlated) with Fortune Mate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Mate Indonesia has no effect on the direction of PT Data i.e., PT Data and Fortune Mate go up and down completely randomly.
Pair Corralation between PT Data and Fortune Mate
Assuming the 90 days trading horizon PT Data is expected to generate 4.36 times less return on investment than Fortune Mate. But when comparing it to its historical volatility, PT Data Sinergitama is 2.63 times less risky than Fortune Mate. It trades about 0.09 of its potential returns per unit of risk. Fortune Mate Indonesia is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 31,600 in Fortune Mate Indonesia on September 12, 2024 and sell it today you would earn a total of 22,900 from holding Fortune Mate Indonesia or generate 72.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Data Sinergitama vs. Fortune Mate Indonesia
Performance |
| Timeline |
| PT Data Sinergitama |
| Fortune Mate Indonesia |
PT Data and Fortune Mate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Data and Fortune Mate
The main advantage of trading using opposite PT Data and Fortune Mate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Data position performs unexpectedly, Fortune Mate 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 Fortune Mate will offset losses from the drop in Fortune Mate's long position.| PT Data vs. Indosterling Technomedia Tbk | PT Data vs. Bekasi Fajar Industrial | PT Data vs. PT Bank Bisnis | PT Data vs. PT Boston Furniture |
| Fortune Mate vs. Kedawung Setia Industrial | Fortune Mate vs. First Media Tbk | Fortune Mate vs. Lion Metal Works | Fortune Mate vs. Garuda Metalindo Tbk |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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