Correlation Between Jembo Cable and PT Indonesia
Can any of the company-specific risk be diversified away by investing in both Jembo Cable and PT Indonesia 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 PT Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jembo Cable and PT Indonesia Kendaraan, you can compare the effects of market volatilities on Jembo Cable and PT Indonesia 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 PT Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jembo Cable and PT Indonesia.
Diversification Opportunities for Jembo Cable and PT Indonesia
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jembo and IPCC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jembo Cable and PT Indonesia Kendaraan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indonesia Kendaraan 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 PT Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indonesia Kendaraan has no effect on the direction of Jembo Cable i.e., Jembo Cable and PT Indonesia go up and down completely randomly.
Pair Corralation between Jembo Cable and PT Indonesia
Assuming the 90 days trading horizon Jembo Cable is expected to under-perform the PT Indonesia. But the stock apears to be less risky and, when comparing its historical volatility, Jembo Cable is 1.22 times less risky than PT Indonesia. The stock trades about -0.02 of its potential returns per unit of risk. The PT Indonesia Kendaraan is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 70,058 in PT Indonesia Kendaraan on September 12, 2024 and sell it today you would earn a total of 1,942 from holding PT Indonesia Kendaraan or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jembo Cable vs. PT Indonesia Kendaraan
Performance |
| Timeline |
| Jembo Cable |
| PT Indonesia Kendaraan |
Jembo Cable and PT Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jembo Cable and PT Indonesia
The main advantage of trading using opposite Jembo Cable and PT Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jembo Cable position performs unexpectedly, PT Indonesia 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 PT Indonesia will offset losses from the drop in PT Indonesia's long position.| Jembo Cable vs. PT Indonesia Kendaraan | Jembo Cable vs. Surya Toto Indonesia | Jembo Cable vs. Mitra Pinasthika Mustika | Jembo Cable vs. Integra Indocabinet Tbk |
| PT Indonesia vs. Jasa Armada Indonesia | PT Indonesia vs. Cikarang Listrindo Tbk | PT Indonesia vs. Mitra Pinasthika Mustika | PT Indonesia vs. Wijaya Karya Bangunan |
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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