Correlation Between Jakarta Int and Colorpak Indonesia
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Colorpak Indonesia 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 Colorpak Indonesia 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 Colorpak Indonesia Tbk, you can compare the effects of market volatilities on Jakarta Int and Colorpak Indonesia 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 Colorpak Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Colorpak Indonesia.
Diversification Opportunities for Jakarta Int and Colorpak Indonesia
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jakarta and Colorpak is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Colorpak Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colorpak Indonesia Tbk 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 Colorpak Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colorpak Indonesia Tbk has no effect on the direction of Jakarta Int i.e., Jakarta Int and Colorpak Indonesia go up and down completely randomly.
Pair Corralation between Jakarta Int and Colorpak Indonesia
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 6.51 times more return on investment than Colorpak Indonesia. However, Jakarta Int is 6.51 times more volatile than Colorpak Indonesia Tbk. It trades about 0.24 of its potential returns per unit of risk. Colorpak Indonesia Tbk is currently generating about 0.1 per unit of risk. If you would invest 37,000 in Jakarta Int Hotels on September 3, 2024 and sell it today you would earn a total of 260,000 from holding Jakarta Int Hotels or generate 702.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Colorpak Indonesia Tbk
Performance |
| Timeline |
| Jakarta Int Hotels |
| Colorpak Indonesia Tbk |
Jakarta Int and Colorpak Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Colorpak Indonesia
The main advantage of trading using opposite Jakarta Int and Colorpak Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Colorpak Indonesia 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 Colorpak Indonesia will offset losses from the drop in Colorpak Indonesia'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 |
| Colorpak Indonesia vs. Timah Persero Tbk | Colorpak Indonesia vs. Semen Indonesia Persero | Colorpak Indonesia vs. Mitra Pinasthika Mustika | Colorpak Indonesia 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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