Correlation Between Pudjiadi Sons and Arkadia Digital
Can any of the company-specific risk be diversified away by investing in both Pudjiadi Sons 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 Pudjiadi Sons and Arkadia Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pudjiadi Sons Tbk and Arkadia Digital Media, you can compare the effects of market volatilities on Pudjiadi Sons 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 Pudjiadi Sons with a short position of Arkadia Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pudjiadi Sons and Arkadia Digital.
Diversification Opportunities for Pudjiadi Sons and Arkadia Digital
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pudjiadi and Arkadia is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Pudjiadi Sons Tbk 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 Pudjiadi Sons 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 Pudjiadi Sons Tbk 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 Pudjiadi Sons i.e., Pudjiadi Sons and Arkadia Digital go up and down completely randomly.
Pair Corralation between Pudjiadi Sons and Arkadia Digital
Assuming the 90 days trading horizon Pudjiadi Sons Tbk is expected to generate 0.84 times more return on investment than Arkadia Digital. However, Pudjiadi Sons Tbk is 1.2 times less risky than Arkadia Digital. It trades about 0.1 of its potential returns per unit of risk. Arkadia Digital Media is currently generating about -0.05 per unit of risk. If you would invest 41,614 in Pudjiadi Sons Tbk on August 27, 2024 and sell it today you would earn a total of 94,386 from holding Pudjiadi Sons Tbk or generate 226.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Pudjiadi Sons Tbk vs. Arkadia Digital Media
Performance |
| Timeline |
| Pudjiadi Sons Tbk |
| Arkadia Digital Media |
Pudjiadi Sons and Arkadia Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pudjiadi Sons and Arkadia Digital
The main advantage of trading using opposite Pudjiadi Sons and Arkadia Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pudjiadi Sons 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.| Pudjiadi Sons vs. Grand Kartech Tbk | Pudjiadi Sons vs. First Media Tbk | Pudjiadi Sons vs. Eastparc Hotel Tbk | Pudjiadi Sons vs. Hotel Sahid Jaya |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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