Correlation Between Jembo Cable and Matahari Department
Can any of the company-specific risk be diversified away by investing in both Jembo Cable and Matahari Department 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 Matahari Department into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jembo Cable and Matahari Department Store, you can compare the effects of market volatilities on Jembo Cable and Matahari Department 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 Matahari Department. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jembo Cable and Matahari Department.
Diversification Opportunities for Jembo Cable and Matahari Department
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jembo and Matahari is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jembo Cable and Matahari Department Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matahari Department Store 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 Matahari Department. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matahari Department Store has no effect on the direction of Jembo Cable i.e., Jembo Cable and Matahari Department go up and down completely randomly.
Pair Corralation between Jembo Cable and Matahari Department
Assuming the 90 days trading horizon Jembo Cable is expected to generate 1.19 times more return on investment than Matahari Department. However, Jembo Cable is 1.19 times more volatile than Matahari Department Store. It trades about -0.01 of its potential returns per unit of risk. Matahari Department Store is currently generating about -0.27 per unit of risk. If you would invest 62,000 in Jembo Cable on September 1, 2024 and sell it today you would lose (500.00) from holding Jembo Cable or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jembo Cable vs. Matahari Department Store
Performance |
| Timeline |
| Jembo Cable |
| Matahari Department Store |
Jembo Cable and Matahari Department Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jembo Cable and Matahari Department
The main advantage of trading using opposite Jembo Cable and Matahari Department positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jembo Cable position performs unexpectedly, Matahari Department 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 Matahari Department will offset losses from the drop in Matahari Department's long position.| Jembo Cable vs. Matahari Department Store | Jembo Cable vs. Multi Medika Internasional | Jembo Cable vs. Visi Media Asia | Jembo Cable vs. Bayan Resources Tbk |
| Matahari Department vs. Surya Citra Media | Matahari Department vs. Akr Corporindo Tbk | Matahari Department vs. Media Nusantara Citra | Matahari Department vs. Pembangunan Perumahan PT |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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