Correlation Between PT Hatten and First Media
Can any of the company-specific risk be diversified away by investing in both PT Hatten 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 PT Hatten and First Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Hatten Bali and First Media Tbk, you can compare the effects of market volatilities on PT Hatten 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 PT Hatten with a short position of First Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Hatten and First Media.
Diversification Opportunities for PT Hatten and First Media
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WINE and First is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding PT Hatten Bali 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 PT Hatten 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 PT Hatten Bali 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 PT Hatten i.e., PT Hatten and First Media go up and down completely randomly.
Pair Corralation between PT Hatten and First Media
Assuming the 90 days trading horizon PT Hatten Bali is expected to generate 1.46 times more return on investment than First Media. However, PT Hatten is 1.46 times more volatile than First Media Tbk. It trades about 0.05 of its potential returns per unit of risk. First Media Tbk is currently generating about 0.01 per unit of risk. If you would invest 17,213 in PT Hatten Bali on September 2, 2024 and sell it today you would earn a total of 17,787 from holding PT Hatten Bali or generate 103.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.58% |
| Values | Daily Returns |
PT Hatten Bali vs. First Media Tbk
Performance |
| Timeline |
| PT Hatten Bali |
| First Media Tbk |
PT Hatten and First Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Hatten and First Media
The main advantage of trading using opposite PT Hatten and First Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Hatten 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.| PT Hatten vs. PT Dewi Shri | PT Hatten vs. PT Data Sinergitama | PT Hatten vs. PAM Mineral Tbk | PT Hatten vs. Autopedia Sukses Lestari |
| First Media vs. Indosat Tbk | First Media vs. XL Axiata Tbk | First Media vs. Energi Mega Persada | First Media vs. Bakrie Brothers 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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