Correlation Between MTY Food and PT Jasa

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

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

Diversification Opportunities for MTY Food and PT Jasa

-0.34

Correlation Coefficient

MTY Food  PT Jasa

Very good diversification

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

Pair Corralation between MTY Food and PT Jasa

Assuming the 90 days horizon MTY Food Group is expected to generate 0.37 times more return on investment than PT Jasa. However, MTY Food Group is 2.7 times less risky than PT Jasa. It trades about -0.03 of its potential returns per unit of risk. PT Jasa Marga is currently generating about -0.04 per unit of risk. If you would invest  3,135  in MTY Food Group on October 7, 2024 and sell it today you would lose (55.00) from holding MTY Food Group or give up 1.75% of portfolio value over 90 days.

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

MTY Food Group  vs.  PT Jasa Marga

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.

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.

Pair Trading with MTY Food and PT Jasa

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

The idea behind MTY Food Group and PT Jasa Marga 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.