Correlation Between Jaya Real and Perdana Gapura

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

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

Diversification Opportunities for Jaya Real and Perdana Gapura

-0.67

Correlation Coefficient

Jaya Real  Perdana Gapura

Excellent diversification

The 3 months correlation between Jaya and Perdana is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Real Property and Perdana Gapura Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdana Gapura Prima and Jaya Real 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 Jaya Real Property are associated (or correlated) with Perdana Gapura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdana Gapura Prima has no effect on the direction of Jaya Real i.e., Jaya Real and Perdana Gapura go up and down completely randomly.

Pair Corralation between Jaya Real and Perdana Gapura

Assuming the 90 days trading horizon Jaya Real Property is expected to generate 0.52 times more return on investment than Perdana Gapura. However, Jaya Real Property is 1.92 times less risky than Perdana Gapura. It trades about 0.12 of its potential returns per unit of risk. Perdana Gapura Prima is currently generating about 0.0 per unit of risk. If you would invest  45,170  in Jaya Real Property on October 12, 2024 and sell it today you would earn a total of  30,330  from holding Jaya Real Property or generate 67.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Jaya Real Property  vs.  Perdana Gapura Prima

Jaya Real Property

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jaya Real Property are ranked lower than 21 (%) 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.

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.

Pair Trading with Jaya Real and Perdana Gapura

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

The idea behind Jaya Real Property and Perdana Gapura Prima 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.