Correlation Between PT Data and Era Media

Can any of the company-specific risk be diversified away by investing in both PT Data and Era 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 Data and Era Media 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 Era Media Sejahtera, you can compare the effects of market volatilities on PT Data and Era 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 Data with a short position of Era Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Data and Era Media.

Diversification Opportunities for PT Data and Era Media

0.24

Correlation Coefficient

PT Data  Era Media

Modest diversification

The 3 months correlation between ELIT and Era is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama and Era Media Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Media Sejahtera 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 Era Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Media Sejahtera has no effect on the direction of PT Data i.e., PT Data and Era Media go up and down completely randomly.

Pair Corralation between PT Data and Era Media

Assuming the 90 days trading horizon PT Data Sinergitama is expected to under-perform the Era Media. In addition to that, PT Data is 1.56 times more volatile than Era Media Sejahtera. It trades about -0.06 of its total potential returns per unit of risk. Era Media Sejahtera is currently generating about -0.01 per unit of volatility. If you would invest  5,600  in Era Media Sejahtera on October 9, 2024 and sell it today you would lose (100.00) from holding Era Media Sejahtera or give up 1.79% of portfolio value over 90 days.

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

PT Data Sinergitama  vs.  Era Media Sejahtera

PT Data Sinergitama

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Data Sinergitama are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Data disclosed solid returns over the last few months and may actually be approaching a breakup point.

Era Media Sejahtera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Era Media Sejahtera has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Era Media is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with PT Data and Era Media

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

The idea behind PT Data Sinergitama and Era Media Sejahtera 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.