Correlation Between Integra Indocabinet and Jaya Sukses

Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and Jaya Sukses 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 Jaya Sukses 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 Jaya Sukses Makmur, you can compare the effects of market volatilities on Integra Indocabinet and Jaya Sukses 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 Jaya Sukses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra Indocabinet and Jaya Sukses.

Diversification Opportunities for Integra Indocabinet and Jaya Sukses

0.26

Correlation Coefficient

Integra Indocabinet  Jaya Sukses

Modest diversification

The 3 months correlation between Integra and Jaya is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Jaya Sukses Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Sukses Makmur 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 Jaya Sukses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Sukses Makmur has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Jaya Sukses go up and down completely randomly.

Pair Corralation between Integra Indocabinet and Jaya Sukses

Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to generate 3.85 times more return on investment than Jaya Sukses. However, Integra Indocabinet is 3.85 times more volatile than Jaya Sukses Makmur. It trades about 0.0 of its potential returns per unit of risk. Jaya Sukses Makmur is currently generating about -0.06 per unit of risk. If you would invest  32,800  in Integra Indocabinet Tbk on December 30, 2024 and sell it today you would lose (1,200) from holding Integra Indocabinet Tbk or give up 3.66% of portfolio value over 90 days.

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

Integra Indocabinet Tbk  vs.  Jaya Sukses Makmur

Integra Indocabinet Tbk

Risk-Adjusted Performance

Very Weak

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

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.

Pair Trading with Integra Indocabinet and Jaya Sukses

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

The idea behind Integra Indocabinet Tbk and Jaya Sukses Makmur 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.