Correlation Between Jembo Cable and Trimegah Karya
Can any of the company-specific risk be diversified away by investing in both Jembo Cable and Trimegah Karya 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 Trimegah Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jembo Cable and Trimegah Karya Pratama, you can compare the effects of market volatilities on Jembo Cable and Trimegah Karya 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 Trimegah Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jembo Cable and Trimegah Karya.
Diversification Opportunities for Jembo Cable and Trimegah Karya
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jembo and Trimegah is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jembo Cable and Trimegah Karya Pratama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Karya Pratama 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 Trimegah Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Karya Pratama has no effect on the direction of Jembo Cable i.e., Jembo Cable and Trimegah Karya go up and down completely randomly.
Pair Corralation between Jembo Cable and Trimegah Karya
Assuming the 90 days trading horizon Jembo Cable is expected to generate 0.88 times more return on investment than Trimegah Karya. However, Jembo Cable is 1.14 times less risky than Trimegah Karya. It trades about -0.01 of its potential returns per unit of risk. Trimegah Karya Pratama is currently generating about -0.17 per unit of risk. If you would invest 61,500 in Jembo Cable on August 30, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jembo Cable vs. Trimegah Karya Pratama
Performance |
| Timeline |
| Jembo Cable |
| Trimegah Karya Pratama |
Jembo Cable and Trimegah Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jembo Cable and Trimegah Karya
The main advantage of trading using opposite Jembo Cable and Trimegah Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jembo Cable position performs unexpectedly, Trimegah Karya 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 Trimegah Karya will offset losses from the drop in Trimegah Karya'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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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