Correlation Between Jakarta Int and Geoprima Solusi
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Geoprima Solusi 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 Geoprima Solusi 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 Geoprima Solusi Tbk, you can compare the effects of market volatilities on Jakarta Int and Geoprima Solusi 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 Geoprima Solusi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Geoprima Solusi.
Diversification Opportunities for Jakarta Int and Geoprima Solusi
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jakarta and Geoprima is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Geoprima Solusi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geoprima Solusi 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 Geoprima Solusi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geoprima Solusi Tbk has no effect on the direction of Jakarta Int i.e., Jakarta Int and Geoprima Solusi go up and down completely randomly.
Pair Corralation between Jakarta Int and Geoprima Solusi
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 0.88 times more return on investment than Geoprima Solusi. However, Jakarta Int Hotels is 1.13 times less risky than Geoprima Solusi. It trades about 0.62 of its potential returns per unit of risk. Geoprima Solusi Tbk is currently generating about 0.49 per unit of risk. If you would invest 49,000 in Jakarta Int Hotels on August 30, 2024 and sell it today you would earn a total of 142,000 from holding Jakarta Int Hotels or generate 289.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Geoprima Solusi Tbk
Performance |
| Timeline |
| Jakarta Int Hotels |
| Geoprima Solusi Tbk |
Jakarta Int and Geoprima Solusi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Geoprima Solusi
The main advantage of trading using opposite Jakarta Int and Geoprima Solusi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Geoprima Solusi 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 Geoprima Solusi will offset losses from the drop in Geoprima Solusi'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 |
| Geoprima Solusi vs. Capital Financial Indonesia | Geoprima Solusi vs. Metrodata Electronics Tbk | Geoprima Solusi vs. Grand Kartech Tbk | Geoprima Solusi vs. Nanotech Indonesia Global |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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