Correlation Between First Media and Cahayaputra Asa
Can any of the company-specific risk be diversified away by investing in both First Media and Cahayaputra Asa 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 First Media and Cahayaputra Asa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Media Tbk and Cahayaputra Asa Keramik, you can compare the effects of market volatilities on First Media and Cahayaputra Asa 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 First Media with a short position of Cahayaputra Asa. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Media and Cahayaputra Asa.
Diversification Opportunities for First Media and Cahayaputra Asa
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Cahayaputra is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding First Media Tbk and Cahayaputra Asa Keramik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cahayaputra Asa Keramik and First Media 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 First Media Tbk are associated (or correlated) with Cahayaputra Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cahayaputra Asa Keramik has no effect on the direction of First Media i.e., First Media and Cahayaputra Asa go up and down completely randomly.
Pair Corralation between First Media and Cahayaputra Asa
Assuming the 90 days trading horizon First Media Tbk is expected to generate 1.34 times more return on investment than Cahayaputra Asa. However, First Media is 1.34 times more volatile than Cahayaputra Asa Keramik. It trades about 0.25 of its potential returns per unit of risk. Cahayaputra Asa Keramik is currently generating about -0.04 per unit of risk. If you would invest 6,200 in First Media Tbk on September 20, 2024 and sell it today you would earn a total of 3,200 from holding First Media Tbk or generate 51.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Media Tbk vs. Cahayaputra Asa Keramik
Performance |
Timeline |
First Media Tbk |
Cahayaputra Asa Keramik |
First Media and Cahayaputra Asa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Media and Cahayaputra Asa
The main advantage of trading using opposite First Media and Cahayaputra Asa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Media position performs unexpectedly, Cahayaputra Asa 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 Cahayaputra Asa will offset losses from the drop in Cahayaputra Asa's long position.First Media vs. Mnc Land Tbk | First Media vs. MNC Vision Networks | First Media vs. Link Net Tbk | First Media vs. Medikaloka Hermina PT |
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Check out your portfolio center.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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