Correlation Between PT Jasa and KeyCorp

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

Diversification Opportunities for PT Jasa and KeyCorp

-0.73

Correlation Coefficient

PT Jasa  KeyCorp

Pay attention - limited upside

The 3 months correlation between 0JM and KeyCorp is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Jasa Marga and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of PT Jasa i.e., PT Jasa and KeyCorp go up and down completely randomly.

Pair Corralation between PT Jasa and KeyCorp

Assuming the 90 days horizon PT Jasa Marga is expected to under-perform the KeyCorp. In addition to that, PT Jasa is 1.33 times more volatile than KeyCorp. It trades about -0.08 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.13 per unit of volatility. If you would invest  1,466  in KeyCorp on September 19, 2024 and sell it today you would earn a total of  243.00  from holding KeyCorp or generate 16.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

PT Jasa Marga  vs.  KeyCorp

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

KeyCorp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KeyCorp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Jasa and KeyCorp

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

The idea behind PT Jasa Marga and KeyCorp 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.