Correlation Between Jaya Sukses and Suryamas Dutamakmur

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

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

Diversification Opportunities for Jaya Sukses and Suryamas Dutamakmur

-0.55

Correlation Coefficient

Jaya Sukses  Suryamas Dutamakmur

Excellent diversification

The 3 months correlation between Jaya and Suryamas is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Sukses Makmur and Suryamas Dutamakmur Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suryamas Dutamakmur Tbk and Jaya Sukses 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 Jaya Sukses Makmur are associated (or correlated) with Suryamas Dutamakmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suryamas Dutamakmur Tbk has no effect on the direction of Jaya Sukses i.e., Jaya Sukses and Suryamas Dutamakmur go up and down completely randomly.

Pair Corralation between Jaya Sukses and Suryamas Dutamakmur

Assuming the 90 days trading horizon Jaya Sukses Makmur is expected to under-perform the Suryamas Dutamakmur. But the stock apears to be less risky and, when comparing its historical volatility, Jaya Sukses Makmur is 11.49 times less risky than Suryamas Dutamakmur. The stock trades about -0.1 of its potential returns per unit of risk. The Suryamas Dutamakmur Tbk is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  52,000  in Suryamas Dutamakmur Tbk on December 22, 2024 and sell it today you would earn a total of  99,000  from holding Suryamas Dutamakmur Tbk or generate 190.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Jaya Sukses Makmur  vs.  Suryamas Dutamakmur Tbk

Jaya Sukses Makmur

Risk-Adjusted Performance

Very Weak

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

Suryamas Dutamakmur Tbk

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Suryamas Dutamakmur Tbk are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Suryamas Dutamakmur disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jaya Sukses and Suryamas Dutamakmur

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

The idea behind Jaya Sukses Makmur and Suryamas Dutamakmur 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.