Correlation Between Itama Ranoraya and Digital Mediatama
Can any of the company-specific risk be diversified away by investing in both Itama Ranoraya and Digital Mediatama 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 Itama Ranoraya and Digital Mediatama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itama Ranoraya and Digital Mediatama Maxima, you can compare the effects of market volatilities on Itama Ranoraya and Digital Mediatama 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 Itama Ranoraya with a short position of Digital Mediatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itama Ranoraya and Digital Mediatama.
Diversification Opportunities for Itama Ranoraya and Digital Mediatama
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Itama and Digital is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Itama Ranoraya and Digital Mediatama Maxima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Mediatama Maxima and Itama Ranoraya 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 Itama Ranoraya are associated (or correlated) with Digital Mediatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Mediatama Maxima has no effect on the direction of Itama Ranoraya i.e., Itama Ranoraya and Digital Mediatama go up and down completely randomly.
Pair Corralation between Itama Ranoraya and Digital Mediatama
Assuming the 90 days trading horizon Itama Ranoraya is expected to under-perform the Digital Mediatama. But the stock apears to be less risky and, when comparing its historical volatility, Itama Ranoraya is 4.9 times less risky than Digital Mediatama. The stock trades about -0.48 of its potential returns per unit of risk. The Digital Mediatama Maxima is currently generating about -0.04 of returns per unit of risk over similar time horizon. 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 |
Itama Ranoraya vs. Digital Mediatama Maxima
Performance |
| Timeline |
| Itama Ranoraya |
| Digital Mediatama Maxima |
Itama Ranoraya and Digital Mediatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itama Ranoraya and Digital Mediatama
The main advantage of trading using opposite Itama Ranoraya and Digital Mediatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itama Ranoraya position performs unexpectedly, Digital Mediatama 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 Digital Mediatama will offset losses from the drop in Digital Mediatama's long position.| Itama Ranoraya vs. Kimia Farma Persero | Itama Ranoraya vs. Indofarma Tbk | Itama Ranoraya vs. Bank BRISyariah Tbk | Itama Ranoraya vs. Bank Rakyat Indonesia |
| Digital Mediatama vs. Elang Mahkota Teknologi | Digital Mediatama vs. M Cash Integrasi | Digital Mediatama vs. Bank Artos Indonesia | Digital Mediatama vs. Bank Yudha Bhakti |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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