Correlation Between Jakarta Int and Multi Bintang
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Multi Bintang 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 Multi Bintang 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 Multi Bintang Indonesia, you can compare the effects of market volatilities on Jakarta Int and Multi Bintang 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 Multi Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Multi Bintang.
Diversification Opportunities for Jakarta Int and Multi Bintang
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jakarta and Multi is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Multi Bintang Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Bintang 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 Multi Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Bintang Indonesia has no effect on the direction of Jakarta Int i.e., Jakarta Int and Multi Bintang go up and down completely randomly.
Pair Corralation between Jakarta Int and Multi Bintang
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 4.49 times more return on investment than Multi Bintang. However, Jakarta Int is 4.49 times more volatile than Multi Bintang Indonesia. It trades about 0.12 of its potential returns per unit of risk. Multi Bintang Indonesia is currently generating about -0.05 per unit of risk. If you would invest 35,800 in Jakarta Int Hotels on September 3, 2024 and sell it today you would earn a total of 209,200 from holding Jakarta Int Hotels or generate 584.36% 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. Multi Bintang Indonesia
Performance |
| Timeline |
| Jakarta Int Hotels |
| Multi Bintang Indonesia |
Jakarta Int and Multi Bintang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Multi Bintang
The main advantage of trading using opposite Jakarta Int and Multi Bintang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Multi Bintang 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 Multi Bintang will offset losses from the drop in Multi Bintang'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 |
| Multi Bintang vs. Delta Djakarta Tbk | Multi Bintang vs. Merck Tbk | Multi Bintang vs. Mayora Indah Tbk | Multi Bintang vs. Ultra Jaya Milk |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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