Correlation Between PT Indonesia and Jembo Cable
Can any of the company-specific risk be diversified away by investing in both PT Indonesia and Jembo Cable 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 Indonesia and Jembo Cable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indonesia Kendaraan and Jembo Cable, you can compare the effects of market volatilities on PT Indonesia and Jembo Cable 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 Indonesia with a short position of Jembo Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indonesia and Jembo Cable.
Diversification Opportunities for PT Indonesia and Jembo Cable
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between IPCC and Jembo is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PT Indonesia Kendaraan and Jembo Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jembo Cable and PT Indonesia 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 Indonesia Kendaraan are associated (or correlated) with Jembo Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jembo Cable has no effect on the direction of PT Indonesia i.e., PT Indonesia and Jembo Cable go up and down completely randomly.
Pair Corralation between PT Indonesia and Jembo Cable
Assuming the 90 days trading horizon PT Indonesia Kendaraan is expected to generate 0.4 times more return on investment than Jembo Cable. However, PT Indonesia Kendaraan is 2.49 times less risky than Jembo Cable. It trades about 0.02 of its potential returns per unit of risk. Jembo Cable is currently generating about 0.0 per unit of risk. If you would invest 68,006 in PT Indonesia Kendaraan on September 12, 2024 and sell it today you would earn a total of 3,494 from holding PT Indonesia Kendaraan or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indonesia Kendaraan vs. Jembo Cable
Performance |
| Timeline |
| PT Indonesia Kendaraan |
| Jembo Cable |
PT Indonesia and Jembo Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indonesia and Jembo Cable
The main advantage of trading using opposite PT Indonesia and Jembo Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indonesia position performs unexpectedly, Jembo Cable 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 Jembo Cable will offset losses from the drop in Jembo Cable's long position.| PT Indonesia vs. Jasa Armada Indonesia | PT Indonesia vs. Cikarang Listrindo Tbk | PT Indonesia vs. Mitra Pinasthika Mustika | PT Indonesia vs. Wijaya Karya Bangunan |
| Jembo Cable vs. PT Indonesia Kendaraan | Jembo Cable vs. Surya Toto Indonesia | Jembo Cable vs. Mitra Pinasthika Mustika | Jembo Cable vs. Integra Indocabinet 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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