Correlation Between Jakarta Int and Bank Cimb
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Bank Cimb 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 Cimb 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 Cimb Niaga, you can compare the effects of market volatilities on Jakarta Int and Bank Cimb 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 Cimb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Bank Cimb.
Diversification Opportunities for Jakarta Int and Bank Cimb
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jakarta and Bank is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Bank Cimb Niaga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Cimb Niaga 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 Cimb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Cimb Niaga has no effect on the direction of Jakarta Int i.e., Jakarta Int and Bank Cimb go up and down completely randomly.
Pair Corralation between Jakarta Int and Bank Cimb
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 13.08 times more return on investment than Bank Cimb. However, Jakarta Int is 13.08 times more volatile than Bank Cimb Niaga. It trades about 0.23 of its potential returns per unit of risk. Bank Cimb Niaga is currently generating about -0.02 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 Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Bank Cimb Niaga
Performance |
| Timeline |
| Jakarta Int Hotels |
| Bank Cimb Niaga |
Jakarta Int and Bank Cimb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Bank Cimb
The main advantage of trading using opposite Jakarta Int and Bank Cimb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Bank Cimb 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 Cimb will offset losses from the drop in Bank Cimb'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 Cimb vs. Bank Danamon Indonesia | Bank Cimb vs. Bank Maybank Indonesia | Bank Cimb vs. Bank Pan Indonesia | Bank Cimb vs. Indosat 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.
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