Correlation Between Pertamina Geothermal and Arkadia Digital
Can any of the company-specific risk be diversified away by investing in both Pertamina Geothermal 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 Pertamina Geothermal and Arkadia Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pertamina Geothermal Energy and Arkadia Digital Media, you can compare the effects of market volatilities on Pertamina Geothermal 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 Pertamina Geothermal with a short position of Arkadia Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pertamina Geothermal and Arkadia Digital.
Diversification Opportunities for Pertamina Geothermal and Arkadia Digital
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pertamina and Arkadia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pertamina Geothermal Energy 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 Pertamina Geothermal 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 Pertamina Geothermal Energy 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 Pertamina Geothermal i.e., Pertamina Geothermal and Arkadia Digital go up and down completely randomly.
Pair Corralation between Pertamina Geothermal and Arkadia Digital
Assuming the 90 days trading horizon Pertamina Geothermal Energy is expected to under-perform the Arkadia Digital. But the stock apears to be less risky and, when comparing its historical volatility, Pertamina Geothermal Energy is 3.86 times less risky than Arkadia Digital. The stock trades about -0.22 of its potential returns per unit of risk. The Arkadia Digital Media is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,600 in Arkadia Digital Media on October 23, 2024 and sell it today you would earn a total of 200.00 from holding Arkadia Digital Media or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pertamina Geothermal Energy vs. Arkadia Digital Media
Performance |
| Timeline |
| Pertamina Geothermal |
| Arkadia Digital Media |
Pertamina Geothermal and Arkadia Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pertamina Geothermal and Arkadia Digital
The main advantage of trading using opposite Pertamina Geothermal and Arkadia Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pertamina Geothermal 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.| Pertamina Geothermal vs. Metrodata Electronics Tbk | Pertamina Geothermal vs. Garuda Metalindo Tbk | Pertamina Geothermal vs. Indorama Synthetics Tbk | Pertamina Geothermal vs. First Media 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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