Correlation Between Clipan Finance and Jaya Konstruksi
Can any of the company-specific risk be diversified away by investing in both Clipan Finance and Jaya Konstruksi 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 Clipan Finance and Jaya Konstruksi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clipan Finance Indonesia and Jaya Konstruksi Manggala, you can compare the effects of market volatilities on Clipan Finance and Jaya Konstruksi 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 Clipan Finance with a short position of Jaya Konstruksi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clipan Finance and Jaya Konstruksi.
Diversification Opportunities for Clipan Finance and Jaya Konstruksi
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clipan and Jaya is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Clipan Finance Indonesia and Jaya Konstruksi Manggala in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Konstruksi Manggala and Clipan Finance 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 Clipan Finance Indonesia are associated (or correlated) with Jaya Konstruksi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Konstruksi Manggala has no effect on the direction of Clipan Finance i.e., Clipan Finance and Jaya Konstruksi go up and down completely randomly.
Pair Corralation between Clipan Finance and Jaya Konstruksi
Assuming the 90 days trading horizon Clipan Finance Indonesia is expected to under-perform the Jaya Konstruksi. But the stock apears to be less risky and, when comparing its historical volatility, Clipan Finance Indonesia is 1.63 times less risky than Jaya Konstruksi. The stock trades about -0.7 of its potential returns per unit of risk. The Jaya Konstruksi Manggala is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 9,800 in Jaya Konstruksi Manggala on August 31, 2024 and sell it today you would lose (1,000.00) from holding Jaya Konstruksi Manggala or give up 10.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clipan Finance Indonesia vs. Jaya Konstruksi Manggala
Performance |
| Timeline |
| Clipan Finance Indonesia |
| Jaya Konstruksi Manggala |
Clipan Finance and Jaya Konstruksi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clipan Finance and Jaya Konstruksi
The main advantage of trading using opposite Clipan Finance and Jaya Konstruksi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clipan Finance position performs unexpectedly, Jaya Konstruksi 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 Konstruksi will offset losses from the drop in Jaya Konstruksi's long position.| Clipan Finance vs. BFI Finance Indonesia | Clipan Finance vs. Adira Dinamika Multi | Clipan Finance vs. Paninvest Tbk | Clipan Finance vs. Panin Financial Tbk |
| Jaya Konstruksi vs. Matahari Department Store | Jaya Konstruksi vs. Multi Medika Internasional | Jaya Konstruksi vs. Visi Media Asia | Jaya Konstruksi vs. Bayan Resources 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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