Correlation Between Buana Listya and Jembo Cable
Can any of the company-specific risk be diversified away by investing in both Buana Listya and Jembo Cable 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 Buana Listya and Jembo Cable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buana Listya Tama and Jembo Cable, you can compare the effects of market volatilities on Buana Listya and Jembo Cable 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 Buana Listya with a short position of Jembo Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buana Listya and Jembo Cable.
Diversification Opportunities for Buana Listya and Jembo Cable
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Buana and Jembo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Buana Listya Tama and Jembo Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jembo Cable and Buana Listya 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 Buana Listya Tama are associated (or correlated) with Jembo Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jembo Cable has no effect on the direction of Buana Listya i.e., Buana Listya and Jembo Cable go up and down completely randomly.
Pair Corralation between Buana Listya and Jembo Cable
Assuming the 90 days trading horizon Buana Listya Tama is expected to under-perform the Jembo Cable. But the stock apears to be less risky and, when comparing its historical volatility, Buana Listya Tama is 11.28 times less risky than Jembo Cable. The stock trades about -0.01 of its potential returns per unit of risk. The Jembo Cable is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 86,147 in Jembo Cable on August 30, 2024 and sell it today you would lose (25,147) from holding Jembo Cable or give up 29.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Buana Listya Tama vs. Jembo Cable
Performance |
| Timeline |
| Buana Listya Tama |
| Jembo Cable |
Buana Listya and Jembo Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buana Listya and Jembo Cable
The main advantage of trading using opposite Buana Listya and Jembo Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buana Listya position performs unexpectedly, Jembo Cable 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 Jembo Cable will offset losses from the drop in Jembo Cable's long position.| Buana Listya vs. City Retail Developments | Buana Listya vs. PT Homeco Victoria | Buana Listya vs. Weha Transportasi Indonesia | Buana Listya vs. First Media Tbk |
| Jembo Cable vs. Pelayaran Nelly Dwi | Jembo Cable vs. Buana Listya Tama | Jembo Cable vs. Mitrabahtera Segara Sejati | Jembo Cable vs. Trans Power Marine |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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