Correlation Between PT Indofood and Jaya Swarasa
Can any of the company-specific risk be diversified away by investing in both PT Indofood 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 PT Indofood and Jaya Swarasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indofood Sukses and Jaya Swarasa Agung, you can compare the effects of market volatilities on PT Indofood 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 PT Indofood with a short position of Jaya Swarasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Jaya Swarasa.
Diversification Opportunities for PT Indofood and Jaya Swarasa
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INDF and Jaya is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses 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 PT Indofood 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 PT Indofood Sukses 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 PT Indofood i.e., PT Indofood and Jaya Swarasa go up and down completely randomly.
Pair Corralation between PT Indofood and Jaya Swarasa
Assuming the 90 days trading horizon PT Indofood Sukses is expected to generate 1.2 times more return on investment than Jaya Swarasa. However, PT Indofood is 1.2 times more volatile than Jaya Swarasa Agung. It trades about 0.03 of its potential returns per unit of risk. Jaya Swarasa Agung is currently generating about -0.41 per unit of risk. If you would invest 757,500 in PT Indofood Sukses on August 30, 2024 and sell it today you would earn a total of 7,500 from holding PT Indofood Sukses or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indofood Sukses vs. Jaya Swarasa Agung
Performance |
| Timeline |
| PT Indofood Sukses |
| Jaya Swarasa Agung |
PT Indofood and Jaya Swarasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Jaya Swarasa
The main advantage of trading using opposite PT Indofood and Jaya Swarasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood 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.| PT Indofood vs. Astra International Tbk | PT Indofood vs. Unilever Indonesia Tbk | PT Indofood vs. Telkom Indonesia Tbk | PT Indofood vs. Bank Mandiri Persero |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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