Correlation Between Integra Indocabinet and Jayamas Medica

Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and Jayamas Medica 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 Integra Indocabinet and Jayamas Medica into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integra Indocabinet Tbk and Jayamas Medica Industri, you can compare the effects of market volatilities on Integra Indocabinet and Jayamas Medica 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 Integra Indocabinet with a short position of Jayamas Medica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra Indocabinet and Jayamas Medica.

Diversification Opportunities for Integra Indocabinet and Jayamas Medica

0.52

Correlation Coefficient

Integra Indocabinet  Jayamas Medica

Very weak diversification

The 3 months correlation between Integra and Jayamas is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Jayamas Medica Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jayamas Medica Industri and Integra Indocabinet 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 Integra Indocabinet Tbk are associated (or correlated) with Jayamas Medica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jayamas Medica Industri has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Jayamas Medica go up and down completely randomly.

Pair Corralation between Integra Indocabinet and Jayamas Medica

Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to generate 1.17 times more return on investment than Jayamas Medica. However, Integra Indocabinet is 1.17 times more volatile than Jayamas Medica Industri. It trades about 0.01 of its potential returns per unit of risk. Jayamas Medica Industri is currently generating about 0.0 per unit of risk. If you would invest  33,600  in Integra Indocabinet Tbk on October 9, 2024 and sell it today you would lose (1,600) from holding Integra Indocabinet Tbk or give up 4.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Integra Indocabinet Tbk  vs.  Jayamas Medica Industri

Integra Indocabinet Tbk

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Indocabinet Tbk are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Integra Indocabinet disclosed solid returns over the last few months and may actually be approaching a breakup point.

Jayamas Medica Industri

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jayamas Medica Industri are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Jayamas Medica may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Integra Indocabinet and Jayamas Medica

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

The idea behind Integra Indocabinet Tbk and Jayamas Medica Industri 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.