Correlation Between Trimegah Karya and Transkon Jaya

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

By analyzing existing cross correlation between Trimegah Karya Pratama and Transkon Jaya Pt, you can compare the effects of market volatilities on Trimegah Karya and Transkon Jaya 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 Trimegah Karya with a short position of Transkon Jaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimegah Karya and Transkon Jaya.

Diversification Opportunities for Trimegah Karya and Transkon Jaya

0.88

Correlation Coefficient

Trimegah Karya  Transkon Jaya

Very poor diversification

The 3 months correlation between Trimegah and Transkon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Trimegah Karya Pratama and Transkon Jaya Pt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transkon Jaya Pt and Trimegah Karya 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 Trimegah Karya Pratama are associated (or correlated) with Transkon Jaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transkon Jaya Pt has no effect on the direction of Trimegah Karya i.e., Trimegah Karya and Transkon Jaya go up and down completely randomly.

Pair Corralation between Trimegah Karya and Transkon Jaya

Assuming the 90 days trading horizon Trimegah Karya Pratama is expected to under-perform the Transkon Jaya. In addition to that, Trimegah Karya is 1.27 times more volatile than Transkon Jaya Pt. It trades about -0.23 of its total potential returns per unit of risk. Transkon Jaya Pt is currently generating about -0.14 per unit of volatility. If you would invest  19,300  in Transkon Jaya Pt on October 26, 2024 and sell it today you would lose (2,500) from holding Transkon Jaya Pt or give up 12.95% of portfolio value over 90 days.

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

Trimegah Karya Pratama  vs.  Transkon Jaya Pt

Trimegah Karya Pratama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trimegah Karya Pratama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Transkon Jaya Pt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transkon Jaya Pt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Trimegah Karya and Transkon Jaya

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

The idea behind Trimegah Karya Pratama and Transkon Jaya Pt 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.