Correlation Between Link Net and First Media
Can any of the company-specific risk be diversified away by investing in both Link Net and First Media 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 Link Net and First Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Link Net Tbk and First Media Tbk, you can compare the effects of market volatilities on Link Net and First Media 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 Link Net with a short position of First Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Link Net and First Media.
Diversification Opportunities for Link Net and First Media
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Link and First is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Link Net Tbk and First Media Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Media Tbk and Link Net 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 Link Net Tbk are associated (or correlated) with First Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Media Tbk has no effect on the direction of Link Net i.e., Link Net and First Media go up and down completely randomly.
Pair Corralation between Link Net and First Media
Assuming the 90 days trading horizon Link Net Tbk is expected to under-perform the First Media. But the stock apears to be less risky and, when comparing its historical volatility, Link Net Tbk is 1.04 times less risky than First Media. The stock trades about -0.03 of its potential returns per unit of risk. The First Media Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 10,100 in First Media Tbk on September 12, 2024 and sell it today you would lose (600.00) from holding First Media Tbk or give up 5.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Link Net Tbk vs. First Media Tbk
Performance |
| Timeline |
| Link Net Tbk |
| First Media Tbk |
Link Net and First Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Link Net and First Media
The main advantage of trading using opposite Link Net and First Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Link Net position performs unexpectedly, First Media 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 First Media will offset losses from the drop in First Media's long position.| Link Net vs. Mnc Land Tbk | Link Net vs. MNC Vision Networks | Link Net vs. MD Pictures Tbk | Link Net vs. Medikaloka Hermina PT |
| First Media vs. Mnc Land Tbk | First Media vs. MNC Vision Networks | First Media vs. MD Pictures Tbk | First Media vs. Link Net Tbk |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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