Correlation Between Fast Food and Dyandra Media

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

By analyzing existing cross correlation between Fast Food Indonesia and Dyandra Media International, you can compare the effects of market volatilities on Fast Food and Dyandra 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 Fast Food with a short position of Dyandra Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Food and Dyandra Media.

Diversification Opportunities for Fast Food and Dyandra Media

0.92

Correlation Coefficient

Fast Food  Dyandra Media

Almost no diversification

The 3 months correlation between Fast and Dyandra is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fast Food Indonesia and Dyandra Media International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dyandra Media Intern and Fast Food 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 Fast Food Indonesia are associated (or correlated) with Dyandra Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dyandra Media Intern has no effect on the direction of Fast Food i.e., Fast Food and Dyandra Media go up and down completely randomly.

Pair Corralation between Fast Food and Dyandra Media

Assuming the 90 days trading horizon Fast Food Indonesia is expected to generate 1.38 times more return on investment than Dyandra Media. However, Fast Food is 1.38 times more volatile than Dyandra Media International. It trades about -0.01 of its potential returns per unit of risk. Dyandra Media International is currently generating about -0.13 per unit of risk. If you would invest  31,600  in Fast Food Indonesia on September 14, 2024 and sell it today you would lose (200.00) from holding Fast Food Indonesia or give up 0.63% of portfolio value over 90 days.

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

Fast Food Indonesia  vs.  Dyandra Media International

Fast Food Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fast Food Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Dyandra Media Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dyandra Media International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Fast Food and Dyandra Media

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

The idea behind Fast Food Indonesia and Dyandra Media International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.