Correlation Between Tsingtao Brewery and PT Jasa

Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and PT Jasa 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 Tsingtao Brewery and PT Jasa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tsingtao Brewery and PT Jasa Marga, you can compare the effects of market volatilities on Tsingtao Brewery and PT Jasa 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 Tsingtao Brewery with a short position of PT Jasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and PT Jasa.

Diversification Opportunities for Tsingtao Brewery and PT Jasa

-0.18

Correlation Coefficient

Tsingtao Brewery  PT Jasa

Good diversification

The 3 months correlation between Tsingtao and 0JM is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and PT Jasa Marga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Jasa Marga and Tsingtao Brewery 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 Tsingtao Brewery are associated (or correlated) with PT Jasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Jasa Marga has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and PT Jasa go up and down completely randomly.

Pair Corralation between Tsingtao Brewery and PT Jasa

Assuming the 90 days trading horizon Tsingtao Brewery is expected to under-perform the PT Jasa. But the stock apears to be less risky and, when comparing its historical volatility, Tsingtao Brewery is 3.89 times less risky than PT Jasa. The stock trades about -0.08 of its potential returns per unit of risk. The PT Jasa Marga is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  24.00  in PT Jasa Marga on October 22, 2024 and sell it today you would earn a total of  0.00  from holding PT Jasa Marga or generate 0.0% return on investment over 90 days.

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

Tsingtao Brewery  vs.  PT Jasa Marga

Tsingtao Brewery

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tsingtao Brewery are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Tsingtao Brewery is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

PT Jasa Marga

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Jasa Marga has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Tsingtao Brewery and PT Jasa

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

The idea behind Tsingtao Brewery and PT Jasa Marga 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.