Correlation Between Imago Mulia and Jaya Trishindo

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

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

Diversification Opportunities for Imago Mulia and Jaya Trishindo

0.23

Correlation Coefficient

Imago Mulia  Jaya Trishindo

Modest diversification

The 3 months correlation between Imago and Jaya is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Imago Mulia Persada and Jaya Trishindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Trishindo Tbk and Imago Mulia 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 Imago Mulia Persada are associated (or correlated) with Jaya Trishindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Trishindo Tbk has no effect on the direction of Imago Mulia i.e., Imago Mulia and Jaya Trishindo go up and down completely randomly.

Pair Corralation between Imago Mulia and Jaya Trishindo

Assuming the 90 days trading horizon Imago Mulia is expected to generate 1.16 times less return on investment than Jaya Trishindo. In addition to that, Imago Mulia is 1.8 times more volatile than Jaya Trishindo Tbk. It trades about 0.14 of its total potential returns per unit of risk. Jaya Trishindo Tbk is currently generating about 0.29 per unit of volatility. If you would invest  25,800  in Jaya Trishindo Tbk on October 20, 2024 and sell it today you would earn a total of  3,200  from holding Jaya Trishindo Tbk or generate 12.4% return on investment over 90 days.

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

Imago Mulia Persada  vs.  Jaya Trishindo Tbk

Imago Mulia Persada

Risk-Adjusted Performance

2 of 100

Weak

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

Jaya Trishindo Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Imago Mulia and Jaya Trishindo

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

The idea behind Imago Mulia Persada and Jaya Trishindo Tbk 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.