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
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alfa and Jasnita is 0.14. 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 1.98 times less risky than Jasnita Telekomindo. The stock trades about -0.04 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 5,300 in Jasnita Telekomindo Tbk on December 2, 2024 and sell it today you would earn a total of 500.00 from holding Jasnita Telekomindo Tbk or generate 9.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Alfa Energi Investama vs. Jasnita Telekomindo Tbk
Performance |
Timeline |
Alfa Energi Investama |
Jasnita Telekomindo Tbk |
Alfa Energi and Jasnita Telekomindo Volatility Contrast
Predicted Return Density |
Returns |
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.Alfa Energi vs. Borneo Olah Sarana | Alfa Energi vs. Kapuas Prima Coal | Alfa Energi vs. Central Omega Resources | Alfa Energi vs. Buana Listya Tama |
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Check out your portfolio center.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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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