Correlation Between Hero Supermarket and J Resources
Can any of the company-specific risk be diversified away by investing in both Hero Supermarket and J Resources 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 Hero Supermarket and J Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hero Supermarket Tbk and J Resources Asia, you can compare the effects of market volatilities on Hero Supermarket and J Resources 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 Hero Supermarket with a short position of J Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hero Supermarket and J Resources.
Diversification Opportunities for Hero Supermarket and J Resources
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hero and PSAB is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hero Supermarket Tbk and J Resources Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Resources Asia and Hero Supermarket 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 Hero Supermarket Tbk are associated (or correlated) with J Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Resources Asia has no effect on the direction of Hero Supermarket i.e., Hero Supermarket and J Resources go up and down completely randomly.
Pair Corralation between Hero Supermarket and J Resources
Assuming the 90 days trading horizon Hero Supermarket Tbk is expected to under-perform the J Resources. But the stock apears to be less risky and, when comparing its historical volatility, Hero Supermarket Tbk is 1.35 times less risky than J Resources. The stock trades about -0.41 of its potential returns per unit of risk. The J Resources Asia is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 30,600 in J Resources Asia on September 4, 2024 and sell it today you would lose (400.00) from holding J Resources Asia or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hero Supermarket Tbk vs. J Resources Asia
Performance |
| Timeline |
| Hero Supermarket Tbk |
| J Resources Asia |
Hero Supermarket and J Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hero Supermarket and J Resources
The main advantage of trading using opposite Hero Supermarket and J Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hero Supermarket position performs unexpectedly, J Resources 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 J Resources will offset losses from the drop in J Resources' long position.| Hero Supermarket vs. Fast Food Indonesia | Hero Supermarket vs. Enseval Putra Megatrading | Hero Supermarket vs. Matahari Putra Prima | Hero Supermarket vs. Hexindo Adiperkasa Tbk |
| J Resources vs. Timah Persero Tbk | J Resources vs. Semen Indonesia Persero | J Resources vs. Mitra Pinasthika Mustika | J Resources vs. Jakarta Int Hotels |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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