Correlation Between Jakarta Int and Fast Food
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Fast Food 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 Fast Food 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 Fast Food Indonesia, you can compare the effects of market volatilities on Jakarta Int and Fast Food 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 Fast Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Fast Food.
Diversification Opportunities for Jakarta Int and Fast Food
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jakarta and Fast is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Fast Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Food 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 Fast Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Food Indonesia has no effect on the direction of Jakarta Int i.e., Jakarta Int and Fast Food go up and down completely randomly.
Pair Corralation between Jakarta Int and Fast Food
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 2.61 times more return on investment than Fast Food. However, Jakarta Int is 2.61 times more volatile than Fast Food Indonesia. It trades about 0.25 of its potential returns per unit of risk. Fast Food Indonesia is currently generating about -0.22 per unit of risk. If you would invest 36,000 in Jakarta Int Hotels on September 3, 2024 and sell it today you would earn a total of 261,000 from holding Jakarta Int Hotels or generate 725.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Fast Food Indonesia
Performance |
| Timeline |
| Jakarta Int Hotels |
| Fast Food Indonesia |
Jakarta Int and Fast Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Fast Food
The main advantage of trading using opposite Jakarta Int and Fast Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Fast Food 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 Fast Food will offset losses from the drop in Fast Food'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 |
| Fast Food vs. Mitra Pinasthika Mustika | Fast Food vs. Jakarta Int Hotels | Fast Food vs. Asuransi Harta Aman | Fast Food vs. Indosterling Technomedia 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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