Correlation Between Ford and Jasuindo Tiga

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

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

Diversification Opportunities for Ford and Jasuindo Tiga

-0.35

Correlation Coefficient

Ford  Jasuindo Tiga

Very good diversification

The 3 months correlation between Ford and Jasuindo is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and Jasuindo Tiga go up and down completely randomly.

Pair Corralation between Ford and Jasuindo Tiga

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Jasuindo Tiga. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.01 times less risky than Jasuindo Tiga. The stock trades about -0.16 of its potential returns per unit of risk. The Jasuindo Tiga Perkasa is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  22,863  in Jasuindo Tiga Perkasa on September 16, 2024 and sell it today you would earn a total of  137.00  from holding Jasuindo Tiga Perkasa or generate 0.6% return on investment over 90 days.

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

Ford Motor  vs.  Jasuindo Tiga Perkasa

Ford Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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 Ford and Jasuindo Tiga

The main advantage of trading using opposite Ford and Jasuindo Tiga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.