Correlation Between Jakarta Int and PT Mulia
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and PT Mulia 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 PT Mulia 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 PT Mulia Industrindo, you can compare the effects of market volatilities on Jakarta Int and PT Mulia 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 PT Mulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and PT Mulia.
Diversification Opportunities for Jakarta Int and PT Mulia
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jakarta and MLIA is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and PT Mulia Industrindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Mulia Industrindo 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 PT Mulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Mulia Industrindo has no effect on the direction of Jakarta Int i.e., Jakarta Int and PT Mulia go up and down completely randomly.
Pair Corralation between Jakarta Int and PT Mulia
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 3.86 times more return on investment than PT Mulia. However, Jakarta Int is 3.86 times more volatile than PT Mulia Industrindo. It trades about 0.16 of its potential returns per unit of risk. PT Mulia Industrindo is currently generating about -0.06 per unit of risk. If you would invest 40,000 in Jakarta Int Hotels on September 4, 2024 and sell it today you would earn a total of 205,000 from holding Jakarta Int Hotels or generate 512.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Int Hotels vs. PT Mulia Industrindo
Performance |
| Timeline |
| Jakarta Int Hotels |
| PT Mulia Industrindo |
Jakarta Int and PT Mulia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and PT Mulia
The main advantage of trading using opposite Jakarta Int and PT Mulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, PT Mulia 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 PT Mulia will offset losses from the drop in PT Mulia'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 |
| PT Mulia vs. Intanwijaya Internasional Tbk | PT Mulia vs. Champion Pacific Indonesia | PT Mulia vs. Mitra Pinasthika Mustika | PT Mulia 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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