Correlation Between BOSTON BEER and PT Jasa

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

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

Diversification Opportunities for BOSTON BEER and PT Jasa

-0.68

Correlation Coefficient

BOSTON BEER  PT Jasa

Excellent diversification

The 3 months correlation between BOSTON and 0JM is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A 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 BOSTON BEER 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 BOSTON BEER A 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 BOSTON BEER i.e., BOSTON BEER and PT Jasa go up and down completely randomly.

Pair Corralation between BOSTON BEER and PT Jasa

Assuming the 90 days trading horizon BOSTON BEER is expected to generate 2.88 times less return on investment than PT Jasa. But when comparing it to its historical volatility, BOSTON BEER A is 1.65 times less risky than PT Jasa. It trades about 0.01 of its potential returns per unit of risk. PT Jasa Marga is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  26.00  in PT Jasa Marga on September 29, 2024 and sell it today you would earn a total of  1.00  from holding PT Jasa Marga or generate 3.85% return on investment over 90 days.

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

BOSTON BEER A   vs.  PT Jasa Marga

BOSTON BEER A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BOSTON BEER A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, BOSTON BEER exhibited solid returns over the last few months and may actually be approaching a breakup point.

PT Jasa Marga

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with BOSTON BEER and PT Jasa

The main advantage of trading using opposite BOSTON BEER and PT Jasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOSTON BEER 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 BOSTON BEER A 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.