Correlation Between Jakarta Int and Bank Negara
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Bank Negara 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 Negara 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 Negara Indonesia, you can compare the effects of market volatilities on Jakarta Int and Bank Negara 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 Negara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Bank Negara.
Diversification Opportunities for Jakarta Int and Bank Negara
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jakarta and Bank is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Bank Negara Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Negara 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 Negara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Negara Indonesia has no effect on the direction of Jakarta Int i.e., Jakarta Int and Bank Negara go up and down completely randomly.
Pair Corralation between Jakarta Int and Bank Negara
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 0.7 times more return on investment than Bank Negara. However, Jakarta Int Hotels is 1.43 times less risky than Bank Negara. It trades about 0.13 of its potential returns per unit of risk. Bank Negara Indonesia is currently generating about 0.03 per unit of risk. If you would invest 35,800 in Jakarta Int Hotels on September 2, 2024 and sell it today you would earn a total of 261,200 from holding Jakarta Int Hotels or generate 729.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Bank Negara Indonesia
Performance |
| Timeline |
| Jakarta Int Hotels |
| Bank Negara Indonesia |
Jakarta Int and Bank Negara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Bank Negara
The main advantage of trading using opposite Jakarta Int and Bank Negara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Bank Negara 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 Negara will offset losses from the drop in Bank Negara'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 |
| Bank Negara vs. Ace Hardware Indonesia | Bank Negara vs. Merdeka Copper Gold | Bank Negara vs. Mitra Pinasthika Mustika | Bank Negara vs. Jakarta Int Hotels |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |