Correlation Between Communication Cable and Jasnita Telekomindo
Can any of the company-specific risk be diversified away by investing in both Communication Cable and Jasnita Telekomindo 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 Communication Cable and Jasnita Telekomindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Communication Cable Systems and Jasnita Telekomindo Tbk, you can compare the effects of market volatilities on Communication Cable and Jasnita Telekomindo 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 Communication Cable with a short position of Jasnita Telekomindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication Cable and Jasnita Telekomindo.
Diversification Opportunities for Communication Cable and Jasnita Telekomindo
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Communication and Jasnita is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Communication Cable Systems and Jasnita Telekomindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasnita Telekomindo Tbk and Communication Cable 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 Communication Cable Systems are associated (or correlated) with Jasnita Telekomindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasnita Telekomindo Tbk has no effect on the direction of Communication Cable i.e., Communication Cable and Jasnita Telekomindo go up and down completely randomly.
Pair Corralation between Communication Cable and Jasnita Telekomindo
Assuming the 90 days trading horizon Communication Cable Systems is expected to under-perform the Jasnita Telekomindo. In addition to that, Communication Cable is 1.03 times more volatile than Jasnita Telekomindo Tbk. It trades about -0.06 of its total potential returns per unit of risk. Jasnita Telekomindo Tbk is currently generating about -0.03 per unit of volatility. If you would invest 8,800 in Jasnita Telekomindo Tbk on September 12, 2024 and sell it today you would lose (3,600) from holding Jasnita Telekomindo Tbk or give up 40.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Communication Cable Systems vs. Jasnita Telekomindo Tbk
Performance |
| Timeline |
| Communication Cable |
| Jasnita Telekomindo Tbk |
Communication Cable and Jasnita Telekomindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication Cable and Jasnita Telekomindo
The main advantage of trading using opposite Communication Cable and Jasnita Telekomindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication Cable position performs unexpectedly, Jasnita Telekomindo 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 Jasnita Telekomindo will offset losses from the drop in Jasnita Telekomindo's long position.| Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri | Communication Cable vs. PT Indonesia Kendaraan |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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