Correlation Between Jembo Cable and Gajah Tunggal
Can any of the company-specific risk be diversified away by investing in both Jembo Cable and Gajah Tunggal 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 Jembo Cable and Gajah Tunggal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jembo Cable and Gajah Tunggal Tbk, you can compare the effects of market volatilities on Jembo Cable and Gajah Tunggal 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 Jembo Cable with a short position of Gajah Tunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jembo Cable and Gajah Tunggal.
Diversification Opportunities for Jembo Cable and Gajah Tunggal
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jembo and Gajah is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jembo Cable and Gajah Tunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gajah Tunggal Tbk and Jembo Cable 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 Jembo Cable are associated (or correlated) with Gajah Tunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gajah Tunggal Tbk has no effect on the direction of Jembo Cable i.e., Jembo Cable and Gajah Tunggal go up and down completely randomly.
Pair Corralation between Jembo Cable and Gajah Tunggal
Assuming the 90 days trading horizon Jembo Cable is expected to under-perform the Gajah Tunggal. But the stock apears to be less risky and, when comparing its historical volatility, Jembo Cable is 1.08 times less risky than Gajah Tunggal. The stock trades about -0.02 of its potential returns per unit of risk. The Gajah Tunggal Tbk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 105,417 in Gajah Tunggal Tbk on August 30, 2024 and sell it today you would earn a total of 10,583 from holding Gajah Tunggal Tbk or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jembo Cable vs. Gajah Tunggal Tbk
Performance |
| Timeline |
| Jembo Cable |
| Gajah Tunggal Tbk |
Jembo Cable and Gajah Tunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jembo Cable and Gajah Tunggal
The main advantage of trading using opposite Jembo Cable and Gajah Tunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jembo Cable position performs unexpectedly, Gajah Tunggal 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 Gajah Tunggal will offset losses from the drop in Gajah Tunggal's long position.| Jembo Cable vs. Kabelindo Murni Tbk | Jembo Cable vs. Sumi Indo Kabel | Jembo Cable vs. Kmi Wire And | Jembo Cable vs. Indospring Tbk |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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