Correlation Between Jembo Cable and Rukun Raharja
Can any of the company-specific risk be diversified away by investing in both Jembo Cable 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 Jembo Cable and Rukun Raharja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jembo Cable and Rukun Raharja Tbk, you can compare the effects of market volatilities on Jembo Cable 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 Jembo Cable with a short position of Rukun Raharja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jembo Cable and Rukun Raharja.
Diversification Opportunities for Jembo Cable and Rukun Raharja
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jembo and Rukun is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Jembo Cable 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 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 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 Jembo Cable i.e., Jembo Cable and Rukun Raharja go up and down completely randomly.
Pair Corralation between Jembo Cable and Rukun Raharja
Assuming the 90 days trading horizon Jembo Cable is expected to under-perform the Rukun Raharja. But the stock apears to be less risky and, when comparing its historical volatility, Jembo Cable is 4.25 times less risky than Rukun Raharja. The stock trades about -0.04 of its potential returns per unit of risk. The Rukun Raharja Tbk is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 173,500 in Rukun Raharja Tbk on August 29, 2024 and sell it today you would earn a total of 60,500 from holding Rukun Raharja Tbk or generate 34.87% 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. Rukun Raharja Tbk
Performance |
| Timeline |
| Jembo Cable |
| Rukun Raharja Tbk |
Jembo Cable and Rukun Raharja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jembo Cable and Rukun Raharja
The main advantage of trading using opposite Jembo Cable and Rukun Raharja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jembo Cable 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.| Jembo Cable vs. Pelayaran Nelly Dwi | Jembo Cable vs. Buana Listya Tama | Jembo Cable vs. Mitrabahtera Segara Sejati | Jembo Cable vs. Trans Power Marine |
| Rukun Raharja vs. Nusantara Infrastructure Tbk | Rukun Raharja vs. Panin Financial Tbk | Rukun Raharja vs. Ramayana Lestari Sentosa | Rukun Raharja vs. Kawasan Industri Jababeka |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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