Correlation Between First Media and PT Hatten
Can any of the company-specific risk be diversified away by investing in both First Media and PT Hatten 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 Hatten 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 Hatten Bali, you can compare the effects of market volatilities on First Media and PT Hatten 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 Hatten. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Media and PT Hatten.
Diversification Opportunities for First Media and PT Hatten
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and WINE is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding First Media Tbk and PT Hatten Bali in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Hatten Bali 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 Hatten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Hatten Bali has no effect on the direction of First Media i.e., First Media and PT Hatten go up and down completely randomly.
Pair Corralation between First Media and PT Hatten
Assuming the 90 days trading horizon First Media is expected to generate 5.76 times less return on investment than PT Hatten. But when comparing it to its historical volatility, First Media Tbk is 1.46 times less risky than PT Hatten. It trades about 0.01 of its potential returns per unit of risk. PT Hatten Bali is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 17,213 in PT Hatten Bali on September 2, 2024 and sell it today you would earn a total of 17,787 from holding PT Hatten Bali or generate 103.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.58% |
| Values | Daily Returns |
First Media Tbk vs. PT Hatten Bali
Performance |
| Timeline |
| First Media Tbk |
| PT Hatten Bali |
First Media and PT Hatten Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Media and PT Hatten
The main advantage of trading using opposite First Media and PT Hatten positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Media position performs unexpectedly, PT Hatten 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 Hatten will offset losses from the drop in PT Hatten's long position.| First Media vs. Indosat Tbk | First Media vs. XL Axiata Tbk | First Media vs. Energi Mega Persada | First Media vs. Bakrie Brothers Tbk |
| PT Hatten vs. PT Dewi Shri | PT Hatten vs. PT Data Sinergitama | PT Hatten vs. PAM Mineral Tbk | PT Hatten vs. Autopedia Sukses Lestari |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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