Correlation Between Armada Hflr and Jasuindo Tiga

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Jasuindo Tiga 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 Armada Hflr and Jasuindo Tiga into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Armada Hflr Pr and Jasuindo Tiga Perkasa, you can compare the effects of market volatilities on Armada Hflr and Jasuindo Tiga 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 Armada Hflr with a short position of Jasuindo Tiga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Jasuindo Tiga.

Diversification Opportunities for Armada Hflr and Jasuindo Tiga

0.24

Correlation Coefficient

Armada Hflr  Jasuindo Tiga

Modest diversification

The 3 months correlation between Armada and Jasuindo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Jasuindo Tiga Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasuindo Tiga Perkasa and Armada Hflr 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 Armada Hflr Pr are associated (or correlated) with Jasuindo Tiga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasuindo Tiga Perkasa has no effect on the direction of Armada Hflr i.e., Armada Hflr and Jasuindo Tiga go up and down completely randomly.

Pair Corralation between Armada Hflr and Jasuindo Tiga

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 0.83 times more return on investment than Jasuindo Tiga. However, Armada Hflr Pr is 1.21 times less risky than Jasuindo Tiga. It trades about -0.08 of its potential returns per unit of risk. Jasuindo Tiga Perkasa is currently generating about -0.11 per unit of risk. If you would invest  1,185  in Armada Hflr Pr on September 16, 2024 and sell it today you would lose (93.00) from holding Armada Hflr Pr or give up 7.85% of portfolio value over 90 days.

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

Armada Hflr Pr  vs.  Jasuindo Tiga Perkasa

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Jasuindo Tiga Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasuindo Tiga Perkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Armada Hflr and Jasuindo Tiga

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

The idea behind Armada Hflr Pr and Jasuindo Tiga Perkasa 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.