Correlation Between Alfa Energi and Jasnita Telekomindo

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

By analyzing existing cross correlation between Alfa Energi Investama and Jasnita Telekomindo Tbk, you can compare the effects of market volatilities on Alfa Energi and Jasnita Telekomindo 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 Alfa Energi with a short position of Jasnita Telekomindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Energi and Jasnita Telekomindo.

Diversification Opportunities for Alfa Energi and Jasnita Telekomindo

0.78

Correlation Coefficient

Alfa Energi  Jasnita Telekomindo

Poor diversification

The 3 months correlation between Alfa and Jasnita is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Energi Investama and Jasnita Telekomindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasnita Telekomindo Tbk and Alfa Energi 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 Alfa Energi Investama are associated (or correlated) with Jasnita Telekomindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasnita Telekomindo Tbk has no effect on the direction of Alfa Energi i.e., Alfa Energi and Jasnita Telekomindo go up and down completely randomly.

Pair Corralation between Alfa Energi and Jasnita Telekomindo

Assuming the 90 days trading horizon Alfa Energi Investama is expected to under-perform the Jasnita Telekomindo. But the stock apears to be less risky and, when comparing its historical volatility, Alfa Energi Investama is 2.18 times less risky than Jasnita Telekomindo. The stock trades about -0.13 of its potential returns per unit of risk. The Jasnita Telekomindo Tbk is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  6,900  in Jasnita Telekomindo Tbk on December 30, 2024 and sell it today you would lose (1,100) from holding Jasnita Telekomindo Tbk or give up 15.94% of portfolio value over 90 days.

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

Alfa Energi Investama  vs.  Jasnita Telekomindo Tbk

Alfa Energi Investama

Risk-Adjusted Performance

Very Weak

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

Jasnita Telekomindo Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jasnita Telekomindo Tbk 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Alfa Energi and Jasnita Telekomindo

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

The idea behind Alfa Energi Investama and Jasnita Telekomindo Tbk 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..