Correlation Between Kabelindo Murni and Jaya Sukses

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

By analyzing existing cross correlation between Kabelindo Murni Tbk and Jaya Sukses Makmur, you can compare the effects of market volatilities on Kabelindo Murni and Jaya Sukses 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 Kabelindo Murni with a short position of Jaya Sukses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kabelindo Murni and Jaya Sukses.

Diversification Opportunities for Kabelindo Murni and Jaya Sukses

-0.86

Correlation Coefficient

Kabelindo Murni  Jaya Sukses

Pay attention - limited upside

The 3 months correlation between Kabelindo and Jaya is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kabelindo Murni Tbk and Jaya Sukses Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Sukses Makmur and Kabelindo Murni 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 Kabelindo Murni Tbk are associated (or correlated) with Jaya Sukses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Sukses Makmur has no effect on the direction of Kabelindo Murni i.e., Kabelindo Murni and Jaya Sukses go up and down completely randomly.

Pair Corralation between Kabelindo Murni and Jaya Sukses

Assuming the 90 days trading horizon Kabelindo Murni Tbk is expected to under-perform the Jaya Sukses. In addition to that, Kabelindo Murni is 3.06 times more volatile than Jaya Sukses Makmur. It trades about -0.05 of its total potential returns per unit of risk. Jaya Sukses Makmur is currently generating about 0.2 per unit of volatility. If you would invest  99,500  in Jaya Sukses Makmur on October 26, 2024 and sell it today you would earn a total of  7,000  from holding Jaya Sukses Makmur or generate 7.04% return on investment over 90 days.

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

Kabelindo Murni Tbk  vs.  Jaya Sukses Makmur

Kabelindo Murni Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kabelindo Murni Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Kabelindo Murni is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Jaya Sukses Makmur

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jaya Sukses Makmur are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Jaya Sukses may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Kabelindo Murni and Jaya Sukses

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

The idea behind Kabelindo Murni Tbk and Jaya Sukses Makmur 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.