Correlation Between Sentral Mitra and Digital Mediatama
Can any of the company-specific risk be diversified away by investing in both Sentral Mitra 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 Sentral Mitra and Digital Mediatama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentral Mitra Informatika and Digital Mediatama Maxima, you can compare the effects of market volatilities on Sentral Mitra 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 Sentral Mitra with a short position of Digital Mediatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentral Mitra and Digital Mediatama.
Diversification Opportunities for Sentral Mitra and Digital Mediatama
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sentral and Digital is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sentral Mitra Informatika 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 Sentral Mitra 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 Sentral Mitra Informatika 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 Sentral Mitra i.e., Sentral Mitra and Digital Mediatama go up and down completely randomly.
Pair Corralation between Sentral Mitra and Digital Mediatama
Assuming the 90 days trading horizon Sentral Mitra is expected to generate 23.67 times less return on investment than Digital Mediatama. But when comparing it to its historical volatility, Sentral Mitra Informatika is 2.69 times less risky than Digital Mediatama. It trades about 0.04 of its potential returns per unit of risk. Digital Mediatama Maxima is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 22,800 in Digital Mediatama Maxima on November 27, 2024 and sell it today you would earn a total of 12,000 from holding Digital Mediatama Maxima or generate 52.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentral Mitra Informatika vs. Digital Mediatama Maxima
Performance |
| Timeline |
| Sentral Mitra Informatika |
| Digital Mediatama Maxima |
Sentral Mitra and Digital Mediatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentral Mitra and Digital Mediatama
The main advantage of trading using opposite Sentral Mitra and Digital Mediatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentral Mitra 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.| Sentral Mitra vs. Kioson Komersial Indonesia | Sentral Mitra vs. Multipolar Technology Tbk | Sentral Mitra vs. Hensel Davest Indonesia | Sentral Mitra vs. NFC Indonesia PT |
| 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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