Correlation Between Indosat Tbk and J Resources
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk 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 Indosat Tbk and J Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and J Resources Asia, you can compare the effects of market volatilities on Indosat Tbk 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 Indosat Tbk with a short position of J Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and J Resources.
Diversification Opportunities for Indosat Tbk and J Resources
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indosat and PSAB is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk 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 Indosat Tbk 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 Indosat Tbk 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 Indosat Tbk i.e., Indosat Tbk and J Resources go up and down completely randomly.
Pair Corralation between Indosat Tbk and J Resources
Assuming the 90 days trading horizon Indosat Tbk is expected to generate 1.1 times more return on investment than J Resources. However, Indosat Tbk is 1.1 times more volatile than J Resources Asia. It trades about 0.08 of its potential returns per unit of risk. J Resources Asia is currently generating about -0.04 per unit of risk. If you would invest 232,000 in Indosat Tbk on August 30, 2024 and sell it today you would earn a total of 12,000 from holding Indosat Tbk or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. J Resources Asia
Performance |
| Timeline |
| Indosat Tbk |
| J Resources Asia |
Indosat Tbk and J Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and J Resources
The main advantage of trading using opposite Indosat Tbk and J Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk 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.| Indosat Tbk vs. Bank Artos Indonesia | Indosat Tbk vs. PT Bukalapak | Indosat Tbk vs. Sumber Alfaria Trijaya | Indosat Tbk vs. Merdeka Copper Gold |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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