Correlation Between Fortune Indonesia and Arkadia Digital
Can any of the company-specific risk be diversified away by investing in both Fortune Indonesia and Arkadia Digital 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 Fortune Indonesia and Arkadia Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortune Indonesia Tbk and Arkadia Digital Media, you can compare the effects of market volatilities on Fortune Indonesia and Arkadia Digital 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 Fortune Indonesia with a short position of Arkadia Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Indonesia and Arkadia Digital.
Diversification Opportunities for Fortune Indonesia and Arkadia Digital
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fortune and Arkadia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Indonesia Tbk and Arkadia Digital Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkadia Digital Media and Fortune Indonesia 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 Fortune Indonesia Tbk are associated (or correlated) with Arkadia Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkadia Digital Media has no effect on the direction of Fortune Indonesia i.e., Fortune Indonesia and Arkadia Digital go up and down completely randomly.
Pair Corralation between Fortune Indonesia and Arkadia Digital
Assuming the 90 days trading horizon Fortune Indonesia Tbk is expected to generate 2.92 times more return on investment than Arkadia Digital. However, Fortune Indonesia is 2.92 times more volatile than Arkadia Digital Media. It trades about 0.04 of its potential returns per unit of risk. Arkadia Digital Media is currently generating about -0.16 per unit of risk. If you would invest 487,000 in Fortune Indonesia Tbk on August 31, 2024 and sell it today you would lose (6,000) from holding Fortune Indonesia Tbk or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortune Indonesia Tbk vs. Arkadia Digital Media
Performance |
| Timeline |
| Fortune Indonesia Tbk |
| Arkadia Digital Media |
Fortune Indonesia and Arkadia Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortune Indonesia and Arkadia Digital
The main advantage of trading using opposite Fortune Indonesia and Arkadia Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Indonesia position performs unexpectedly, Arkadia Digital 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 Arkadia Digital will offset losses from the drop in Arkadia Digital's long position.| Fortune Indonesia vs. Indosat Tbk | Fortune Indonesia vs. XL Axiata Tbk | Fortune Indonesia vs. Energi Mega Persada | Fortune Indonesia vs. Bakrie Brothers Tbk |
| Arkadia Digital vs. Electronic City Indonesia | Arkadia Digital vs. MD Pictures Tbk | Arkadia Digital vs. Bintang Oto Global | Arkadia Digital vs. Graha Layar Prima |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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