Correlation Between Pembangunan Jaya and Jakarta Setiabudi
Can any of the company-specific risk be diversified away by investing in both Pembangunan Jaya and Jakarta Setiabudi 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 Pembangunan Jaya and Jakarta Setiabudi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembangunan Jaya Ancol and Jakarta Setiabudi Internasional, you can compare the effects of market volatilities on Pembangunan Jaya and Jakarta Setiabudi 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 Pembangunan Jaya with a short position of Jakarta Setiabudi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembangunan Jaya and Jakarta Setiabudi.
Diversification Opportunities for Pembangunan Jaya and Jakarta Setiabudi
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pembangunan and Jakarta is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pembangunan Jaya Ancol and Jakarta Setiabudi Internasiona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jakarta Setiabudi and Pembangunan Jaya 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 Pembangunan Jaya Ancol are associated (or correlated) with Jakarta Setiabudi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jakarta Setiabudi has no effect on the direction of Pembangunan Jaya i.e., Pembangunan Jaya and Jakarta Setiabudi go up and down completely randomly.
Pair Corralation between Pembangunan Jaya and Jakarta Setiabudi
Assuming the 90 days trading horizon Pembangunan Jaya Ancol is expected to under-perform the Jakarta Setiabudi. But the stock apears to be less risky and, when comparing its historical volatility, Pembangunan Jaya Ancol is 13.71 times less risky than Jakarta Setiabudi. The stock trades about -0.22 of its potential returns per unit of risk. The Jakarta Setiabudi Internasional is currently generating about 0.3 of returns per unit of risk over similar time horizon. 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 Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Pembangunan Jaya Ancol vs. Jakarta Setiabudi Internasiona
Performance |
Timeline |
Pembangunan Jaya Ancol |
Jakarta Setiabudi |
Pembangunan Jaya and Jakarta Setiabudi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pembangunan Jaya and Jakarta Setiabudi
The main advantage of trading using opposite Pembangunan Jaya and Jakarta Setiabudi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembangunan Jaya position performs unexpectedly, Jakarta Setiabudi 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 Jakarta Setiabudi will offset losses from the drop in Jakarta Setiabudi's long position.Pembangunan Jaya vs. Pembangunan Graha Lestari | Pembangunan Jaya vs. Hotel Sahid Jaya | Pembangunan Jaya vs. Mitrabara Adiperdana PT | Pembangunan Jaya vs. PT Multi Garam |
Jakarta Setiabudi vs. Pembangunan Graha Lestari | Jakarta Setiabudi vs. Pembangunan Jaya Ancol | Jakarta Setiabudi vs. Hotel Sahid Jaya | Jakarta Setiabudi vs. Mitrabara Adiperdana PT |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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