Correlation Between Sumber Energi and Arkadia Digital
Can any of the company-specific risk be diversified away by investing in both Sumber Energi 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 Sumber Energi and Arkadia Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Energi Andalan and Arkadia Digital Media, you can compare the effects of market volatilities on Sumber Energi 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 Sumber Energi with a short position of Arkadia Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Energi and Arkadia Digital.
Diversification Opportunities for Sumber Energi and Arkadia Digital
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumber and Arkadia is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Energi Andalan 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 Sumber Energi 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 Sumber Energi Andalan 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 Sumber Energi i.e., Sumber Energi and Arkadia Digital go up and down completely randomly.
Pair Corralation between Sumber Energi and Arkadia Digital
Assuming the 90 days trading horizon Sumber Energi Andalan is expected to generate 0.81 times more return on investment than Arkadia Digital. However, Sumber Energi Andalan is 1.23 times less risky than Arkadia Digital. It trades about -0.15 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 83,500 in Sumber Energi Andalan on August 31, 2024 and sell it today you would lose (8,500) from holding Sumber Energi Andalan or give up 10.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumber Energi Andalan vs. Arkadia Digital Media
Performance |
| Timeline |
| Sumber Energi Andalan |
| Arkadia Digital Media |
Sumber Energi and Arkadia Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Energi and Arkadia Digital
The main advantage of trading using opposite Sumber Energi and Arkadia Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Energi 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.| Sumber Energi vs. Intanwijaya Internasional Tbk | Sumber Energi vs. Indal Aluminium Industry | Sumber Energi vs. Inter Delta Tbk | Sumber Energi vs. Lionmesh Prima 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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