Correlation Between Jasnita Telekomindo and PT Primadaya

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

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

Diversification Opportunities for Jasnita Telekomindo and PT Primadaya

-0.61

Correlation Coefficient

Jasnita Telekomindo  PT Primadaya

Excellent diversification

The 3 months correlation between Jasnita and PDPP is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Jasnita Telekomindo Tbk and PT Primadaya Plastisindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Primadaya Plastisindo and Jasnita Telekomindo 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 Jasnita Telekomindo Tbk are associated (or correlated) with PT Primadaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Primadaya Plastisindo has no effect on the direction of Jasnita Telekomindo i.e., Jasnita Telekomindo and PT Primadaya go up and down completely randomly.

Pair Corralation between Jasnita Telekomindo and PT Primadaya

Assuming the 90 days trading horizon Jasnita Telekomindo is expected to generate 1.72 times less return on investment than PT Primadaya. In addition to that, Jasnita Telekomindo is 2.79 times more volatile than PT Primadaya Plastisindo. It trades about 0.03 of its total potential returns per unit of risk. PT Primadaya Plastisindo is currently generating about 0.13 per unit of volatility. If you would invest  48,600  in PT Primadaya Plastisindo on December 22, 2024 and sell it today you would earn a total of  8,400  from holding PT Primadaya Plastisindo or generate 17.28% return on investment over 90 days.

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

Jasnita Telekomindo Tbk  vs.  PT Primadaya Plastisindo

Jasnita Telekomindo Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jasnita Telekomindo Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Jasnita Telekomindo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PT Primadaya Plastisindo

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PT Primadaya Plastisindo are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, PT Primadaya disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jasnita Telekomindo and PT Primadaya

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

The idea behind Jasnita Telekomindo Tbk and PT Primadaya Plastisindo 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.