Correlation Between J Resources and Digital Mediatama
Can any of the company-specific risk be diversified away by investing in both J Resources 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 J Resources and Digital Mediatama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Resources Asia and Digital Mediatama Maxima, you can compare the effects of market volatilities on J Resources 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 J Resources with a short position of Digital Mediatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Resources and Digital Mediatama.
Diversification Opportunities for J Resources and Digital Mediatama
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PSAB and Digital is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding J Resources Asia 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 J Resources 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 J Resources Asia 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 J Resources i.e., J Resources and Digital Mediatama go up and down completely randomly.
Pair Corralation between J Resources and Digital Mediatama
Assuming the 90 days trading horizon J Resources Asia is expected to generate 1.18 times more return on investment than Digital Mediatama. However, J Resources is 1.18 times more volatile than Digital Mediatama Maxima. It trades about 0.13 of its potential returns per unit of risk. Digital Mediatama Maxima is currently generating about 0.13 per unit of risk. If you would invest 15,200 in J Resources Asia on September 1, 2024 and sell it today you would earn a total of 15,000 from holding J Resources Asia or generate 98.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Resources Asia vs. Digital Mediatama Maxima
Performance |
| Timeline |
| J Resources Asia |
| Digital Mediatama Maxima |
J Resources and Digital Mediatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Resources and Digital Mediatama
The main advantage of trading using opposite J Resources and Digital Mediatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Resources 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.| J Resources vs. Merdeka Copper Gold | J Resources vs. Golden Eagle Energy | J Resources vs. Rukun Raharja Tbk | J Resources vs. Wilton Makmur Indonesia |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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