Correlation Between Jakarta Int and Bank Capital
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Bank Capital 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 Jakarta Int and Bank Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jakarta Int Hotels and Bank Capital Indonesia, you can compare the effects of market volatilities on Jakarta Int and Bank Capital 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 Jakarta Int with a short position of Bank Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Bank Capital.
Diversification Opportunities for Jakarta Int and Bank Capital
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jakarta and Bank is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Bank Capital Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Capital Indonesia and Jakarta Int 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 Jakarta Int Hotels are associated (or correlated) with Bank Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Capital Indonesia has no effect on the direction of Jakarta Int i.e., Jakarta Int and Bank Capital go up and down completely randomly.
Pair Corralation between Jakarta Int and Bank Capital
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 9.78 times more return on investment than Bank Capital. However, Jakarta Int is 9.78 times more volatile than Bank Capital Indonesia. It trades about 0.58 of its potential returns per unit of risk. Bank Capital Indonesia is currently generating about -0.03 per unit of risk. If you would invest 95,000 in Jakarta Int Hotels on September 3, 2024 and sell it today you would earn a total of 202,000 from holding Jakarta Int Hotels or generate 212.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Bank Capital Indonesia
Performance |
| Timeline |
| Jakarta Int Hotels |
| Bank Capital Indonesia |
Jakarta Int and Bank Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Bank Capital
The main advantage of trading using opposite Jakarta Int and Bank Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Bank Capital 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 Bank Capital will offset losses from the drop in Bank Capital's long position.| Jakarta Int vs. Mitra Pinasthika Mustika | Jakarta Int vs. Asuransi Harta Aman | Jakarta Int vs. Indosterling Technomedia Tbk | Jakarta Int vs. Indosat Tbk |
| Bank Capital vs. Bank Mnc Internasional | Bank Capital vs. Bank Bumi Arta | Bank Capital vs. Bank Victoria International | Bank Capital vs. Bank Qnb Indonesia |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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