Correlation Between Akr Corporindo and Ultra Jaya
Can any of the company-specific risk be diversified away by investing in both Akr Corporindo and Ultra 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 Akr Corporindo and Ultra Jaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akr Corporindo Tbk and Ultra Jaya Milk, you can compare the effects of market volatilities on Akr Corporindo and Ultra 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 Akr Corporindo with a short position of Ultra Jaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akr Corporindo and Ultra Jaya.
Diversification Opportunities for Akr Corporindo and Ultra Jaya
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Akr and Ultra is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Akr Corporindo Tbk and Ultra Jaya Milk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Jaya Milk and Akr Corporindo 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 Akr Corporindo Tbk are associated (or correlated) with Ultra Jaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Jaya Milk has no effect on the direction of Akr Corporindo i.e., Akr Corporindo and Ultra Jaya go up and down completely randomly.
Pair Corralation between Akr Corporindo and Ultra Jaya
Assuming the 90 days trading horizon Akr Corporindo Tbk is expected to under-perform the Ultra Jaya. In addition to that, Akr Corporindo is 1.74 times more volatile than Ultra Jaya Milk. It trades about -0.16 of its total potential returns per unit of risk. Ultra Jaya Milk is currently generating about -0.19 per unit of volatility. If you would invest 184,000 in Ultra Jaya Milk on August 28, 2024 and sell it today you would lose (12,000) from holding Ultra Jaya Milk or give up 6.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akr Corporindo Tbk vs. Ultra Jaya Milk
Performance |
| Timeline |
| Akr Corporindo Tbk |
| Ultra Jaya Milk |
Akr Corporindo and Ultra Jaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akr Corporindo and Ultra Jaya
The main advantage of trading using opposite Akr Corporindo and Ultra Jaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akr Corporindo position performs unexpectedly, Ultra 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 Ultra Jaya will offset losses from the drop in Ultra Jaya's long position.| Akr Corporindo vs. Charoen Pokphand Indonesia | Akr Corporindo vs. Indocement Tunggal Prakarsa | Akr Corporindo vs. Bumi Serpong Damai | Akr Corporindo vs. Jasa Marga Tbk |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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