Correlation Between Jasuindo Tiga and Perdana Bangun

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

By analyzing existing cross correlation between Jasuindo Tiga Perkasa and Perdana Bangun Pusaka, you can compare the effects of market volatilities on Jasuindo Tiga and Perdana Bangun 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 Jasuindo Tiga with a short position of Perdana Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jasuindo Tiga and Perdana Bangun.

Diversification Opportunities for Jasuindo Tiga and Perdana Bangun

-0.87

Correlation Coefficient

Jasuindo Tiga  Perdana Bangun

Pay attention - limited upside

The 3 months correlation between Jasuindo and Perdana is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jasuindo Tiga Perkasa and Perdana Bangun Pusaka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdana Bangun Pusaka and Jasuindo Tiga 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 Jasuindo Tiga Perkasa are associated (or correlated) with Perdana Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdana Bangun Pusaka has no effect on the direction of Jasuindo Tiga i.e., Jasuindo Tiga and Perdana Bangun go up and down completely randomly.

Pair Corralation between Jasuindo Tiga and Perdana Bangun

Assuming the 90 days trading horizon Jasuindo Tiga Perkasa is expected to generate 0.14 times more return on investment than Perdana Bangun. However, Jasuindo Tiga Perkasa is 6.95 times less risky than Perdana Bangun. It trades about 0.02 of its potential returns per unit of risk. Perdana Bangun Pusaka is currently generating about -0.09 per unit of risk. If you would invest  22,863  in Jasuindo Tiga Perkasa on September 15, 2024 and sell it today you would earn a total of  137.00  from holding Jasuindo Tiga Perkasa or generate 0.6% return on investment over 90 days.

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

Jasuindo Tiga Perkasa  vs.  Perdana Bangun Pusaka

Jasuindo Tiga Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasuindo Tiga Perkasa 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Perdana Bangun Pusaka

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perdana Bangun Pusaka are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Perdana Bangun disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jasuindo Tiga and Perdana Bangun

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

The idea behind Jasuindo Tiga Perkasa and Perdana Bangun Pusaka 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.