Correlation Between First Media and PT Data
Can any of the company-specific risk be diversified away by investing in both First Media 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 First Media and PT Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Media Tbk and PT Data Sinergitama, you can compare the effects of market volatilities on First Media 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 First Media with a short position of PT Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Media and PT Data.
Diversification Opportunities for First Media and PT Data
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and ELIT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding First Media Tbk 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 First Media 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 First Media Tbk 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 First Media i.e., First Media and PT Data go up and down completely randomly.
Pair Corralation between First Media and PT Data
Assuming the 90 days trading horizon First Media Tbk is expected to generate 1.01 times more return on investment than PT Data. However, First Media is 1.01 times more volatile than PT Data Sinergitama. It trades about 0.35 of its potential returns per unit of risk. PT Data Sinergitama is currently generating about -0.24 per unit of risk. If you would invest 8,000 in First Media Tbk on August 28, 2024 and sell it today you would earn a total of 2,000 from holding First Media Tbk or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Media Tbk vs. PT Data Sinergitama
Performance |
| Timeline |
| First Media Tbk |
| PT Data Sinergitama |
First Media and PT Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Media and PT Data
The main advantage of trading using opposite First Media and PT Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Media 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.| First Media vs. Bekasi Fajar Industrial | First Media vs. Lion Metal Works | First Media vs. Alumindo Light Metal | First Media vs. Ashmore Asset Management |
| PT Data vs. Multipolar Technology Tbk | PT Data vs. Digital Mediatama Maxima | PT Data vs. M Cash Integrasi | PT Data vs. NFC Indonesia PT |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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