Correlation Between Jakarta Setiabudi and Kawasan Industri
Can any of the company-specific risk be diversified away by investing in both Jakarta Setiabudi and Kawasan Industri 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 Jakarta Setiabudi and Kawasan Industri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jakarta Setiabudi Internasional and Kawasan Industri Jababeka, you can compare the effects of market volatilities on Jakarta Setiabudi and Kawasan Industri 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 Jakarta Setiabudi with a short position of Kawasan Industri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Setiabudi and Kawasan Industri.
Diversification Opportunities for Jakarta Setiabudi and Kawasan Industri
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jakarta and Kawasan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Setiabudi Internasiona and Kawasan Industri Jababeka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawasan Industri Jababeka and Jakarta Setiabudi 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 Jakarta Setiabudi Internasional are associated (or correlated) with Kawasan Industri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawasan Industri Jababeka has no effect on the direction of Jakarta Setiabudi i.e., Jakarta Setiabudi and Kawasan Industri go up and down completely randomly.
Pair Corralation between Jakarta Setiabudi and Kawasan Industri
Assuming the 90 days trading horizon Jakarta Setiabudi Internasional is expected to generate 9.13 times more return on investment than Kawasan Industri. However, Jakarta Setiabudi is 9.13 times more volatile than Kawasan Industri Jababeka. It trades about 0.3 of its potential returns per unit of risk. Kawasan Industri Jababeka is currently generating about 0.14 per unit of risk. If you would invest 185,000 in Jakarta Setiabudi Internasional on September 12, 2024 and sell it today you would earn a total of 895,000 from holding Jakarta Setiabudi Internasional or generate 483.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Jakarta Setiabudi Internasiona vs. Kawasan Industri Jababeka
Performance |
Timeline |
Jakarta Setiabudi |
Kawasan Industri Jababeka |
Jakarta Setiabudi and Kawasan Industri Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jakarta Setiabudi and Kawasan Industri
The main advantage of trading using opposite Jakarta Setiabudi and Kawasan Industri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Setiabudi position performs unexpectedly, Kawasan Industri 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 Kawasan Industri will offset losses from the drop in Kawasan Industri's long position.Jakarta Setiabudi vs. Pembangunan Graha Lestari | Jakarta Setiabudi vs. Pembangunan Jaya Ancol | Jakarta Setiabudi vs. Hotel Sahid Jaya | Jakarta Setiabudi vs. Mitrabara Adiperdana PT |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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