Correlation Between PT Jasa and MTY Food

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

By analyzing existing cross correlation between PT Jasa Marga and MTY Food Group, you can compare the effects of market volatilities on PT Jasa and MTY Food 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 Jasa with a short position of MTY Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Jasa and MTY Food.

Diversification Opportunities for PT Jasa and MTY Food

-0.34

Correlation Coefficient

PT Jasa  MTY Food

Very good diversification

The 3 months correlation between 0JM and MTY is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PT Jasa Marga and MTY Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTY Food Group and PT Jasa 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 Jasa Marga are associated (or correlated) with MTY Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTY Food Group has no effect on the direction of PT Jasa i.e., PT Jasa and MTY Food go up and down completely randomly.

Pair Corralation between PT Jasa and MTY Food

Assuming the 90 days horizon PT Jasa Marga is expected to under-perform the MTY Food. In addition to that, PT Jasa is 2.43 times more volatile than MTY Food Group. It trades about -0.03 of its total potential returns per unit of risk. MTY Food Group is currently generating about 0.02 per unit of volatility. If you would invest  3,046  in MTY Food Group on October 7, 2024 and sell it today you would earn a total of  34.00  from holding MTY Food Group or generate 1.12% return on investment over 90 days.

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

PT Jasa Marga  vs.  MTY Food Group

PT Jasa Marga

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Jasa Marga has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

MTY Food Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MTY Food Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MTY Food is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Jasa and MTY Food

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

The idea behind PT Jasa Marga and MTY Food Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.