Correlation Between Jakarta Int and Cita Mineral
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Cita Mineral 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 Cita Mineral 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 Cita Mineral Investindo, you can compare the effects of market volatilities on Jakarta Int and Cita Mineral 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 Cita Mineral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Cita Mineral.
Diversification Opportunities for Jakarta Int and Cita Mineral
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jakarta and Cita is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Cita Mineral Investindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cita Mineral Investindo 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 Cita Mineral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cita Mineral Investindo has no effect on the direction of Jakarta Int i.e., Jakarta Int and Cita Mineral go up and down completely randomly.
Pair Corralation between Jakarta Int and Cita Mineral
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 2.31 times more return on investment than Cita Mineral. However, Jakarta Int is 2.31 times more volatile than Cita Mineral Investindo. It trades about 0.28 of its potential returns per unit of risk. Cita Mineral Investindo is currently generating about 0.12 per unit of risk. If you would invest 33,800 in Jakarta Int Hotels on September 3, 2024 and sell it today you would earn a total of 263,200 from holding Jakarta Int Hotels or generate 778.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Cita Mineral Investindo
Performance |
| Timeline |
| Jakarta Int Hotels |
| Cita Mineral Investindo |
Jakarta Int and Cita Mineral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Cita Mineral
The main advantage of trading using opposite Jakarta Int and Cita Mineral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Cita Mineral 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 Cita Mineral will offset losses from the drop in Cita Mineral'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 |
| Cita Mineral vs. Citatah Tbk | Cita Mineral vs. Indo Kordsa Tbk | Cita Mineral vs. Central Omega Resources | Cita Mineral vs. Betonjaya Manunggal 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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