Correlation Between PT Global and Equinix

Can any of the company-specific risk be diversified away by investing in both PT Global and Equinix 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 Global and Equinix into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Global Mediacom and Equinix, you can compare the effects of market volatilities on PT Global and Equinix 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 Global with a short position of Equinix. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Global and Equinix.

Diversification Opportunities for PT Global and Equinix

-0.5

Correlation Coefficient

PT Global  Equinix

Very good diversification

The 3 months correlation between 06L and Equinix is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding PT Global Mediacom and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix and PT Global 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 Global Mediacom are associated (or correlated) with Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of PT Global i.e., PT Global and Equinix go up and down completely randomly.

Pair Corralation between PT Global and Equinix

Assuming the 90 days trading horizon PT Global Mediacom is expected to generate 13.1 times more return on investment than Equinix. However, PT Global is 13.1 times more volatile than Equinix. It trades about 0.05 of its potential returns per unit of risk. Equinix is currently generating about 0.15 per unit of risk. If you would invest  0.75  in PT Global Mediacom on October 4, 2024 and sell it today you would lose (0.20) from holding PT Global Mediacom or give up 26.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

PT Global Mediacom  vs.  Equinix

PT Global Mediacom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Global Mediacom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Equinix

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Equinix are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Equinix reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Global and Equinix

The main advantage of trading using opposite PT Global and Equinix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Global position performs unexpectedly, Equinix 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 Equinix will offset losses from the drop in Equinix's long position.

The idea behind PT Global Mediacom and Equinix pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.