Correlation Between Arkadia Digital and Victoria Insurance
Can any of the company-specific risk be diversified away by investing in both Arkadia Digital and Victoria Insurance 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 Victoria Insurance 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 Victoria Insurance Tbk, you can compare the effects of market volatilities on Arkadia Digital and Victoria Insurance 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 Victoria Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arkadia Digital and Victoria Insurance.
Diversification Opportunities for Arkadia Digital and Victoria Insurance
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arkadia and Victoria is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Arkadia Digital Media and Victoria Insurance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victoria Insurance 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 Victoria Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victoria Insurance Tbk has no effect on the direction of Arkadia Digital i.e., Arkadia Digital and Victoria Insurance go up and down completely randomly.
Pair Corralation between Arkadia Digital and Victoria Insurance
Assuming the 90 days trading horizon Arkadia Digital Media is expected to generate 2.36 times more return on investment than Victoria Insurance. However, Arkadia Digital is 2.36 times more volatile than Victoria Insurance Tbk. It trades about -0.01 of its potential returns per unit of risk. Victoria Insurance Tbk is currently generating about -0.11 per unit of risk. If you would invest 1,600 in Arkadia Digital Media on September 14, 2024 and sell it today you would lose (100.00) from holding Arkadia Digital Media or give up 6.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Arkadia Digital Media vs. Victoria Insurance Tbk
Performance |
Timeline |
Arkadia Digital Media |
Victoria Insurance Tbk |
Arkadia Digital and Victoria Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arkadia Digital and Victoria Insurance
The main advantage of trading using opposite Arkadia Digital and Victoria Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arkadia Digital position performs unexpectedly, Victoria Insurance 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 Victoria Insurance will offset losses from the drop in Victoria Insurance'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 |
Victoria Insurance vs. Paninvest Tbk | Victoria Insurance vs. Maskapai Reasuransi Indonesia | Victoria Insurance vs. Panin Sekuritas Tbk | Victoria Insurance vs. Wahana Ottomitra Multiartha |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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