Correlation Between Perdana Gapura and Jaya Real

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

By analyzing existing cross correlation between Perdana Gapura Prima and Jaya Real Property, you can compare the effects of market volatilities on Perdana Gapura and Jaya Real 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 Perdana Gapura with a short position of Jaya Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perdana Gapura and Jaya Real.

Diversification Opportunities for Perdana Gapura and Jaya Real

-0.76

Correlation Coefficient

Perdana Gapura  Jaya Real

Pay attention - limited upside

The 3 months correlation between Perdana and Jaya is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Perdana Gapura Prima and Jaya Real Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Real Property and Perdana Gapura 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 Perdana Gapura Prima are associated (or correlated) with Jaya Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Real Property has no effect on the direction of Perdana Gapura i.e., Perdana Gapura and Jaya Real go up and down completely randomly.

Pair Corralation between Perdana Gapura and Jaya Real

Assuming the 90 days trading horizon Perdana Gapura Prima is expected to under-perform the Jaya Real. In addition to that, Perdana Gapura is 1.81 times more volatile than Jaya Real Property. It trades about -0.01 of its total potential returns per unit of risk. Jaya Real Property is currently generating about 0.03 per unit of volatility. If you would invest  68,939  in Jaya Real Property on October 27, 2024 and sell it today you would earn a total of  5,061  from holding Jaya Real Property or generate 7.34% return on investment over 90 days.

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

Perdana Gapura Prima  vs.  Jaya Real Property

Perdana Gapura Prima

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perdana Gapura Prima 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Jaya Real Property

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jaya Real Property are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Jaya Real disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perdana Gapura and Jaya Real

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

The idea behind Perdana Gapura Prima and Jaya Real Property 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .