Correlation Between Jakarta Int and Gozco Plantations
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Gozco Plantations 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 Gozco Plantations 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 Gozco Plantations Tbk, you can compare the effects of market volatilities on Jakarta Int and Gozco Plantations 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 Gozco Plantations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Gozco Plantations.
Diversification Opportunities for Jakarta Int and Gozco Plantations
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jakarta and Gozco is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Gozco Plantations Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gozco Plantations 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 Gozco Plantations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gozco Plantations Tbk has no effect on the direction of Jakarta Int i.e., Jakarta Int and Gozco Plantations go up and down completely randomly.
Pair Corralation between Jakarta Int and Gozco Plantations
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to under-perform the Gozco Plantations. In addition to that, Jakarta Int is 2.56 times more volatile than Gozco Plantations Tbk. It trades about -0.28 of its total potential returns per unit of risk. Gozco Plantations Tbk is currently generating about -0.24 per unit of volatility. If you would invest 11,100 in Gozco Plantations Tbk on November 29, 2024 and sell it today you would lose (1,200) from holding Gozco Plantations Tbk or give up 10.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Gozco Plantations Tbk
Performance |
| Timeline |
| Jakarta Int Hotels |
| Gozco Plantations Tbk |
Jakarta Int and Gozco Plantations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Gozco Plantations
The main advantage of trading using opposite Jakarta Int and Gozco Plantations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Gozco Plantations 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 Gozco Plantations will offset losses from the drop in Gozco Plantations' 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 |
| Gozco Plantations vs. Sampoerna Agro Tbk | Gozco Plantations vs. Tunas Baru Lampung | Gozco Plantations vs. Bakrie Sumatera Plantations | Gozco Plantations vs. Bisi International 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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