Correlation Between Indocement Tunggal and Jasa Marga
Can any of the company-specific risk be diversified away by investing in both Indocement Tunggal and Jasa Marga 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 Indocement Tunggal and Jasa Marga into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indocement Tunggal Prakarsa and Jasa Marga Tbk, you can compare the effects of market volatilities on Indocement Tunggal and Jasa Marga 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 Indocement Tunggal with a short position of Jasa Marga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indocement Tunggal and Jasa Marga.
Diversification Opportunities for Indocement Tunggal and Jasa Marga
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Indocement and Jasa is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Indocement Tunggal Prakarsa and Jasa Marga Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasa Marga Tbk and Indocement Tunggal 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 Indocement Tunggal Prakarsa are associated (or correlated) with Jasa Marga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasa Marga Tbk has no effect on the direction of Indocement Tunggal i.e., Indocement Tunggal and Jasa Marga go up and down completely randomly.
Pair Corralation between Indocement Tunggal and Jasa Marga
Assuming the 90 days trading horizon Indocement Tunggal Prakarsa is expected to under-perform the Jasa Marga. But the stock apears to be less risky and, when comparing its historical volatility, Indocement Tunggal Prakarsa is 1.11 times less risky than Jasa Marga. The stock trades about -0.68 of its potential returns per unit of risk. The Jasa Marga Tbk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 433,000 in Jasa Marga Tbk on October 26, 2024 and sell it today you would earn a total of 9,000 from holding Jasa Marga Tbk or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indocement Tunggal Prakarsa vs. Jasa Marga Tbk
Performance |
| Timeline |
| Indocement Tunggal |
| Jasa Marga Tbk |
Indocement Tunggal and Jasa Marga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indocement Tunggal and Jasa Marga
The main advantage of trading using opposite Indocement Tunggal and Jasa Marga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indocement Tunggal position performs unexpectedly, Jasa Marga 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 Jasa Marga will offset losses from the drop in Jasa Marga's long position.| Indocement Tunggal vs. Semen Indonesia Persero | Indocement Tunggal vs. United Tractors Tbk | Indocement Tunggal vs. PT Indofood Sukses | Indocement Tunggal vs. Kalbe Farma Tbk |
| Jasa Marga vs. Semen Indonesia Persero | Jasa Marga vs. Wijaya Karya Beton | Jasa Marga vs. Perusahaan Gas Negara | Jasa Marga vs. PT Indofood Sukses |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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