Correlation Between Bintang Oto and Arkadia Digital

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

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

Diversification Opportunities for Bintang Oto and Arkadia Digital

0.57

Correlation Coefficient

Bintang Oto  Arkadia Digital

Very weak diversification

The 3 months correlation between Bintang and Arkadia is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bintang Oto Global 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 Bintang Oto 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 Bintang Oto Global 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 Bintang Oto i.e., Bintang Oto and Arkadia Digital go up and down completely randomly.

Pair Corralation between Bintang Oto and Arkadia Digital

Assuming the 90 days trading horizon Bintang Oto Global is expected to under-perform the Arkadia Digital. But the stock apears to be less risky and, when comparing its historical volatility, Bintang Oto Global is 1.08 times less risky than Arkadia Digital. The stock trades about -0.2 of its potential returns per unit of risk. The Arkadia Digital Media is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,600  in Arkadia Digital Media on September 21, 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	Weak
Accuracy	98.44%
Values	Daily Returns

Bintang Oto Global  vs.  Arkadia Digital Media

Bintang Oto Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bintang Oto Global 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.

Arkadia Digital Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arkadia Digital Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Arkadia Digital 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 Bintang Oto and Arkadia Digital

The main advantage of trading using opposite Bintang Oto and Arkadia Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bintang Oto 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 Bintang Oto Global 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.