Correlation Between PT Indonesia and J Resources
Can any of the company-specific risk be diversified away by investing in both PT Indonesia and J Resources 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 J Resources 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 J Resources Asia, you can compare the effects of market volatilities on PT Indonesia and J Resources 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 J Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indonesia and J Resources.
Diversification Opportunities for PT Indonesia and J Resources
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IPCC and PSAB is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding PT Indonesia Kendaraan and J Resources Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Resources Asia 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 J Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Resources Asia has no effect on the direction of PT Indonesia i.e., PT Indonesia and J Resources go up and down completely randomly.
Pair Corralation between PT Indonesia and J Resources
Assuming the 90 days trading horizon PT Indonesia Kendaraan is expected to generate 0.44 times more return on investment than J Resources. However, PT Indonesia Kendaraan is 2.29 times less risky than J Resources. It trades about 0.14 of its potential returns per unit of risk. J Resources Asia is currently generating about -0.09 per unit of risk. If you would invest 71,500 in PT Indonesia Kendaraan on September 1, 2024 and sell it today you would earn a total of 2,500 from holding PT Indonesia Kendaraan or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indonesia Kendaraan vs. J Resources Asia
Performance |
| Timeline |
| PT Indonesia Kendaraan |
| J Resources Asia |
PT Indonesia and J Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indonesia and J Resources
The main advantage of trading using opposite PT Indonesia and J Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indonesia position performs unexpectedly, J Resources 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 J Resources will offset losses from the drop in J Resources' 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 |
| J Resources vs. Merdeka Copper Gold | J Resources vs. Golden Eagle Energy | J Resources vs. Rukun Raharja Tbk | J Resources vs. Wilton Makmur Indonesia |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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