Correlation Between PT Data and Arkadia Digital

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

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

Diversification Opportunities for PT Data and Arkadia Digital

0.03

Correlation Coefficient

PT Data  Arkadia Digital

Significant diversification

The 3 months correlation between ELIT and Arkadia is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama and Arkadia Digital Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkadia Digital Media and PT Data 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 Data Sinergitama are associated (or correlated) with Arkadia Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkadia Digital Media has no effect on the direction of PT Data i.e., PT Data and Arkadia Digital go up and down completely randomly.

Pair Corralation between PT Data and Arkadia Digital

Assuming the 90 days trading horizon PT Data is expected to generate 2.04 times less return on investment than Arkadia Digital. But when comparing it to its historical volatility, PT Data Sinergitama is 1.98 times less risky than Arkadia Digital. It trades about 0.09 of its potential returns per unit of risk. Arkadia Digital Media is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,600  in Arkadia Digital Media on October 24, 2024 and sell it today you would earn a total of  100.00  from holding Arkadia Digital Media or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PT Data Sinergitama  vs.  Arkadia Digital Media

PT Data Sinergitama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Data Sinergitama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Arkadia Digital Media

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Arkadia Digital Media are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Arkadia Digital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Data and Arkadia Digital

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

The idea behind PT Data Sinergitama and Arkadia Digital Media 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.