Correlation Between MD Pictures and Visi Media

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

By analyzing existing cross correlation between MD Pictures Tbk and Visi Media Asia, you can compare the effects of market volatilities on MD Pictures and Visi 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 MD Pictures with a short position of Visi Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of MD Pictures and Visi Media.

Diversification Opportunities for MD Pictures and Visi Media

-0.03

Correlation Coefficient

MD Pictures  Visi Media

Good diversification

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

Pair Corralation between MD Pictures and Visi Media

Assuming the 90 days trading horizon MD Pictures Tbk is expected to under-perform the Visi Media. But the stock apears to be less risky and, when comparing its historical volatility, MD Pictures Tbk is 1.5 times less risky than Visi Media. The stock trades about -0.1 of its potential returns per unit of risk. The Visi Media Asia is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  600.00  in Visi Media Asia on December 19, 2024 and sell it today you would earn a total of  800.00  from holding Visi Media Asia or generate 133.33% return on investment over 90 days.

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

MD Pictures Tbk  vs.  Visi Media Asia

MD Pictures Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days MD Pictures Tbk 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Visi Media Asia

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visi Media Asia are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Visi Media disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MD Pictures and Visi Media

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

The idea behind MD Pictures Tbk and Visi Media Asia 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.