Correlation Between Indonesia Fibreboard and Jaya Swarasa
Can any of the company-specific risk be diversified away by investing in both Indonesia Fibreboard and Jaya Swarasa 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 Fibreboard and Jaya Swarasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indonesia Fibreboard Industry and Jaya Swarasa Agung, you can compare the effects of market volatilities on Indonesia Fibreboard and Jaya Swarasa 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 Fibreboard with a short position of Jaya Swarasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Fibreboard and Jaya Swarasa.
Diversification Opportunities for Indonesia Fibreboard and Jaya Swarasa
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Indonesia and Jaya is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Fibreboard Industry and Jaya Swarasa Agung in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Swarasa Agung and Indonesia Fibreboard 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 Fibreboard Industry are associated (or correlated) with Jaya Swarasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Swarasa Agung has no effect on the direction of Indonesia Fibreboard i.e., Indonesia Fibreboard and Jaya Swarasa go up and down completely randomly.
Pair Corralation between Indonesia Fibreboard and Jaya Swarasa
Assuming the 90 days trading horizon Indonesia Fibreboard Industry is expected to generate 0.61 times more return on investment than Jaya Swarasa. However, Indonesia Fibreboard Industry is 1.63 times less risky than Jaya Swarasa. It trades about 0.09 of its potential returns per unit of risk. Jaya Swarasa Agung is currently generating about -0.11 per unit of risk. If you would invest 18,534 in Indonesia Fibreboard Industry on August 30, 2024 and sell it today you would earn a total of 1,466 from holding Indonesia Fibreboard Industry or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indonesia Fibreboard Industry vs. Jaya Swarasa Agung
Performance |
| Timeline |
| Indonesia Fibreboard |
| Jaya Swarasa Agung |
Indonesia Fibreboard and Jaya Swarasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Fibreboard and Jaya Swarasa
The main advantage of trading using opposite Indonesia Fibreboard and Jaya Swarasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Fibreboard position performs unexpectedly, Jaya Swarasa 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 Swarasa will offset losses from the drop in Jaya Swarasa's long position.| Indonesia Fibreboard vs. Gunung Raja Paksi | Indonesia Fibreboard vs. Ifishdeco PT | Indonesia Fibreboard vs. Saraswanti Anugerah Makmur | Indonesia Fibreboard vs. Putra Mandiri Jembar |
| Jaya Swarasa vs. Sentra Food Indonesia | Jaya Swarasa vs. Buyung Poetra Sembada | Jaya Swarasa vs. Garudafood Putra Putri | Jaya Swarasa vs. Campina Ice Cream |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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