Correlation Between Fast Food and PT Data
Can any of the company-specific risk be diversified away by investing in both Fast Food and PT Data 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 Fast Food and PT Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Food Indonesia and PT Data Sinergitama, you can compare the effects of market volatilities on Fast Food and PT Data 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 Fast Food with a short position of PT Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Food and PT Data.
Diversification Opportunities for Fast Food and PT Data
Very good diversification
The 3 months correlation between Fast and ELIT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fast Food Indonesia and PT Data Sinergitama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Data Sinergitama and Fast Food 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 Fast Food Indonesia are associated (or correlated) with PT Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Data Sinergitama has no effect on the direction of Fast Food i.e., Fast Food and PT Data go up and down completely randomly.
Pair Corralation between Fast Food and PT Data
Assuming the 90 days trading horizon Fast Food Indonesia is expected to under-perform the PT Data. But the stock apears to be less risky and, when comparing its historical volatility, Fast Food Indonesia is 1.97 times less risky than PT Data. The stock trades about -0.08 of its potential returns per unit of risk. The PT Data Sinergitama is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10,493 in PT Data Sinergitama on August 26, 2024 and sell it today you would earn a total of 1,307 from holding PT Data Sinergitama or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.75% |
| Values | Daily Returns |
Fast Food Indonesia vs. PT Data Sinergitama
Performance |
| Timeline |
| Fast Food Indonesia |
| PT Data Sinergitama |
Fast Food and PT Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Food and PT Data
The main advantage of trading using opposite Fast Food and PT Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Food position performs unexpectedly, PT Data 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 PT Data will offset losses from the drop in PT Data's long position.| Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Indoritel Makmur Internasional | Fast Food vs. Enseval Putra Megatrading | Fast Food vs. Fks Multi Agro |
| PT Data vs. Tridomain Performance Materials | PT Data vs. Fast Food Indonesia | PT Data vs. Metrodata Electronics Tbk | PT Data vs. Communication Cable Systems |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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