Correlation Between PT Jasa and GBS Software

Can any of the company-specific risk be diversified away by investing in both PT Jasa and GBS Software 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 GBS Software 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 GBS Software AG, you can compare the effects of market volatilities on PT Jasa and GBS Software 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 GBS Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Jasa and GBS Software.

Diversification Opportunities for PT Jasa and GBS Software

-0.37

Correlation Coefficient

PT Jasa  GBS Software

Very good diversification

The 3 months correlation between 0JM and GBS is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding PT Jasa Marga and GBS Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBS Software AG 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 GBS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBS Software AG has no effect on the direction of PT Jasa i.e., PT Jasa and GBS Software go up and down completely randomly.

Pair Corralation between PT Jasa and GBS Software

Assuming the 90 days horizon PT Jasa Marga is expected to generate 1.79 times more return on investment than GBS Software. However, PT Jasa is 1.79 times more volatile than GBS Software AG. It trades about 0.03 of its potential returns per unit of risk. GBS Software AG is currently generating about 0.05 per unit of risk. If you would invest  18.00  in PT Jasa Marga on October 23, 2024 and sell it today you would earn a total of  5.00  from holding PT Jasa Marga or generate 27.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

PT Jasa Marga  vs.  GBS Software AG

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GBS Software AG

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GBS Software AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GBS Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Jasa and GBS Software

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

The idea behind PT Jasa Marga and GBS Software AG 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.