Correlation Between Indonesia Pondasi and Jaya Konstruksi
Can any of the company-specific risk be diversified away by investing in both Indonesia Pondasi 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 Indonesia Pondasi and Jaya Konstruksi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indonesia Pondasi Raya and Jaya Konstruksi Manggala, you can compare the effects of market volatilities on Indonesia Pondasi 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 Indonesia Pondasi with a short position of Jaya Konstruksi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Pondasi and Jaya Konstruksi.
Diversification Opportunities for Indonesia Pondasi and Jaya Konstruksi
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indonesia and Jaya is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Pondasi Raya 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 Indonesia Pondasi 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 Indonesia Pondasi Raya 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 Indonesia Pondasi i.e., Indonesia Pondasi and Jaya Konstruksi go up and down completely randomly.
Pair Corralation between Indonesia Pondasi and Jaya Konstruksi
Assuming the 90 days trading horizon Indonesia Pondasi Raya is expected to generate 1.31 times more return on investment than Jaya Konstruksi. However, Indonesia Pondasi is 1.31 times more volatile than Jaya Konstruksi Manggala. It trades about -0.15 of its potential returns per unit of risk. Jaya Konstruksi Manggala is currently generating about -0.28 per unit of risk. If you would invest 19,100 in Indonesia Pondasi Raya on September 2, 2024 and sell it today you would lose (1,600) from holding Indonesia Pondasi Raya or give up 8.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indonesia Pondasi Raya vs. Jaya Konstruksi Manggala
Performance |
| Timeline |
| Indonesia Pondasi Raya |
| Jaya Konstruksi Manggala |
Indonesia Pondasi and Jaya Konstruksi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Pondasi and Jaya Konstruksi
The main advantage of trading using opposite Indonesia Pondasi and Jaya Konstruksi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Pondasi 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.| Indonesia Pondasi vs. Matahari Department Store | Indonesia Pondasi vs. Multi Medika Internasional | Indonesia Pondasi vs. Visi Media Asia | Indonesia Pondasi vs. Bayan Resources Tbk |
| Jaya Konstruksi vs. Jaya Real Property | Jaya Konstruksi vs. Perdana Gapura Prima | Jaya Konstruksi vs. Jakarta Int Hotels | Jaya Konstruksi vs. Mnc Land 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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