Correlation Between Fks Multi and Jembo Cable
Can any of the company-specific risk be diversified away by investing in both Fks Multi 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 Fks Multi and Jembo Cable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fks Multi Agro and Jembo Cable, you can compare the effects of market volatilities on Fks Multi 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 Fks Multi with a short position of Jembo Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fks Multi and Jembo Cable.
Diversification Opportunities for Fks Multi and Jembo Cable
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fks and Jembo is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fks Multi Agro and Jembo Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jembo Cable and Fks Multi 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 Fks Multi Agro 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 Fks Multi i.e., Fks Multi and Jembo Cable go up and down completely randomly.
Pair Corralation between Fks Multi and Jembo Cable
Assuming the 90 days trading horizon Fks Multi is expected to generate 13.14 times less return on investment than Jembo Cable. But when comparing it to its historical volatility, Fks Multi Agro is 23.51 times less risky than Jembo Cable. It trades about 0.07 of its potential returns per unit of risk. 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 | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Fks Multi Agro vs. Jembo Cable
Performance |
| Timeline |
| Fks Multi Agro |
| Jembo Cable |
Fks Multi and Jembo Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fks Multi and Jembo Cable
The main advantage of trading using opposite Fks Multi and Jembo Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fks Multi 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.| Fks Multi vs. Bakrieland Development Tbk | Fks Multi vs. Bakrie Brothers Tbk | Fks Multi vs. Energi Mega Persada | Fks Multi vs. Sampoerna Agro Tbk |
| Jembo Cable vs. Kabelindo Murni Tbk | Jembo Cable vs. Sumi Indo Kabel | Jembo Cable vs. Kmi Wire And | Jembo Cable vs. Indospring 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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