Correlation Between Jakarta Int and Bali Towerindo
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Bali Towerindo 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 Bali Towerindo 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 Bali Towerindo Sentra, you can compare the effects of market volatilities on Jakarta Int and Bali Towerindo 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 Bali Towerindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Bali Towerindo.
Diversification Opportunities for Jakarta Int and Bali Towerindo
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jakarta and Bali is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Bali Towerindo Sentra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bali Towerindo Sentra 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 Bali Towerindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bali Towerindo Sentra has no effect on the direction of Jakarta Int i.e., Jakarta Int and Bali Towerindo go up and down completely randomly.
Pair Corralation between Jakarta Int and Bali Towerindo
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 2.44 times more return on investment than Bali Towerindo. However, Jakarta Int is 2.44 times more volatile than Bali Towerindo Sentra. It trades about 0.23 of its potential returns per unit of risk. Bali Towerindo Sentra is currently generating about 0.26 per unit of risk. If you would invest 118,500 in Jakarta Int Hotels on September 12, 2024 and sell it today you would earn a total of 67,500 from holding Jakarta Int Hotels or generate 56.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Bali Towerindo Sentra
Performance |
| Timeline |
| Jakarta Int Hotels |
| Bali Towerindo Sentra |
Jakarta Int and Bali Towerindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Bali Towerindo
The main advantage of trading using opposite Jakarta Int and Bali Towerindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Bali Towerindo 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 Bali Towerindo will offset losses from the drop in Bali Towerindo's long position.| Jakarta Int vs. Jaya Real Property | Jakarta Int vs. Mnc Land Tbk | Jakarta Int vs. Kawasan Industri Jababeka | Jakarta Int vs. Duta Pertiwi Tbk |
| Bali Towerindo vs. Austindo Nusantara Jaya | Bali Towerindo vs. Inti Bangun Sejahtera | Bali Towerindo vs. Bukaka Teknik Utama | Bali Towerindo vs. Blue Bird Tbk |
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.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |