Correlation Between Jasa Armada and Rukun Raharja
Can any of the company-specific risk be diversified away by investing in both Jasa Armada and Rukun Raharja 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 Jasa Armada and Rukun Raharja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jasa Armada Indonesia and Rukun Raharja Tbk, you can compare the effects of market volatilities on Jasa Armada and Rukun Raharja 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 Jasa Armada with a short position of Rukun Raharja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jasa Armada and Rukun Raharja.
Diversification Opportunities for Jasa Armada and Rukun Raharja
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jasa and Rukun is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jasa Armada Indonesia and Rukun Raharja Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rukun Raharja Tbk and Jasa Armada 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 Jasa Armada Indonesia are associated (or correlated) with Rukun Raharja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rukun Raharja Tbk has no effect on the direction of Jasa Armada i.e., Jasa Armada and Rukun Raharja go up and down completely randomly.
Pair Corralation between Jasa Armada and Rukun Raharja
Assuming the 90 days trading horizon Jasa Armada is expected to generate 1491.46 times less return on investment than Rukun Raharja. But when comparing it to its historical volatility, Jasa Armada Indonesia is 13.4 times less risky than Rukun Raharja. It trades about 0.0 of its potential returns per unit of risk. Rukun Raharja Tbk is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 173,500 in Rukun Raharja Tbk on August 28, 2024 and sell it today you would earn a total of 74,500 from holding Rukun Raharja Tbk or generate 42.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jasa Armada Indonesia vs. Rukun Raharja Tbk
Performance |
| Timeline |
| Jasa Armada Indonesia |
| Rukun Raharja Tbk |
Jasa Armada and Rukun Raharja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jasa Armada and Rukun Raharja
The main advantage of trading using opposite Jasa Armada and Rukun Raharja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jasa Armada position performs unexpectedly, Rukun Raharja 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 Rukun Raharja will offset losses from the drop in Rukun Raharja's long position.The idea behind Jasa Armada Indonesia and Rukun Raharja Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |