Correlation Between Charoen Pokphand and Jakarta Setiabudi
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Jakarta Setiabudi 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 Charoen Pokphand and Jakarta Setiabudi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charoen Pokphand Indonesia and Jakarta Setiabudi Internasional, you can compare the effects of market volatilities on Charoen Pokphand and Jakarta Setiabudi 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 Charoen Pokphand with a short position of Jakarta Setiabudi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Jakarta Setiabudi.
Diversification Opportunities for Charoen Pokphand and Jakarta Setiabudi
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Charoen and Jakarta is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Indonesia and Jakarta Setiabudi Internasiona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jakarta Setiabudi and Charoen Pokphand 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 Charoen Pokphand Indonesia are associated (or correlated) with Jakarta Setiabudi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jakarta Setiabudi has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Jakarta Setiabudi go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Jakarta Setiabudi
Assuming the 90 days trading horizon Charoen Pokphand Indonesia is expected to under-perform the Jakarta Setiabudi. But the stock apears to be less risky and, when comparing its historical volatility, Charoen Pokphand Indonesia is 4.15 times less risky than Jakarta Setiabudi. The stock trades about -0.01 of its potential returns per unit of risk. The Jakarta Setiabudi Internasional is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 90,925 in Jakarta Setiabudi Internasional on September 2, 2024 and sell it today you would earn a total of 854,075 from holding Jakarta Setiabudi Internasional or generate 939.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Indonesia vs. Jakarta Setiabudi Internasiona
Performance |
| Timeline |
| Charoen Pokphand Ind |
| Jakarta Setiabudi |
Charoen Pokphand and Jakarta Setiabudi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Jakarta Setiabudi
The main advantage of trading using opposite Charoen Pokphand and Jakarta Setiabudi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Jakarta Setiabudi 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 Jakarta Setiabudi will offset losses from the drop in Jakarta Setiabudi's long position.| Charoen Pokphand vs. Bank BRISyariah Tbk | Charoen Pokphand vs. Mitra Pinasthika Mustika | Charoen Pokphand vs. Jakarta Int Hotels | Charoen Pokphand vs. Indosterling Technomedia Tbk |
| Jakarta Setiabudi vs. Japfa Comfeed Indonesia | Jakarta Setiabudi vs. Charoen Pokphand Indonesia | Jakarta Setiabudi vs. Erajaya Swasembada Tbk | Jakarta Setiabudi vs. Indofood Cbp Sukses |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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