Correlation Between Arkadia Digital and First Media
Can any of the company-specific risk be diversified away by investing in both Arkadia Digital 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 Arkadia Digital and First Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arkadia Digital Media and First Media Tbk, you can compare the effects of market volatilities on Arkadia Digital 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 Arkadia Digital with a short position of First Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arkadia Digital and First Media.
Diversification Opportunities for Arkadia Digital and First Media
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Arkadia and First is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Arkadia Digital Media 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 Arkadia Digital 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 Arkadia Digital Media 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 Arkadia Digital i.e., Arkadia Digital and First Media go up and down completely randomly.
Pair Corralation between Arkadia Digital and First Media
Assuming the 90 days trading horizon Arkadia Digital Media is expected to generate 2.58 times more return on investment than First Media. However, Arkadia Digital is 2.58 times more volatile than First Media Tbk. It trades about 0.1 of its potential returns per unit of risk. First Media Tbk is currently generating about -0.14 per unit of risk. If you would invest 1,400 in Arkadia Digital Media on December 4, 2024 and sell it today you would earn a total of 300.00 from holding Arkadia Digital Media or generate 21.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Arkadia Digital Media vs. First Media Tbk
Performance |
Timeline |
Arkadia Digital Media |
First Media Tbk |
Arkadia Digital and First Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arkadia Digital and First Media
The main advantage of trading using opposite Arkadia Digital and First Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arkadia Digital 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.Arkadia Digital vs. Electronic City Indonesia | Arkadia Digital vs. MD Pictures Tbk | Arkadia Digital vs. Bintang Oto Global | Arkadia Digital vs. Graha Layar Prima |
First Media vs. Bekasi Fajar Industrial | First Media vs. PT Bank Bisnis | First Media vs. Lippo General Insurance | First Media vs. City Retail Developments |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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