Correlation Between Jakarta Int and Pelat Timah
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Pelat Timah 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 Pelat Timah 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 Pelat Timah Nusantara, you can compare the effects of market volatilities on Jakarta Int and Pelat Timah 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 Pelat Timah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Pelat Timah.
Diversification Opportunities for Jakarta Int and Pelat Timah
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jakarta and Pelat is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Pelat Timah Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pelat Timah Nusantara 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 Pelat Timah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pelat Timah Nusantara has no effect on the direction of Jakarta Int i.e., Jakarta Int and Pelat Timah go up and down completely randomly.
Pair Corralation between Jakarta Int and Pelat Timah
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 1.09 times more return on investment than Pelat Timah. However, Jakarta Int is 1.09 times more volatile than Pelat Timah Nusantara. It trades about 0.13 of its potential returns per unit of risk. Pelat Timah Nusantara is currently generating about -0.04 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 261,200 from holding Jakarta Int Hotels or generate 729.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Pelat Timah Nusantara
Performance |
| Timeline |
| Jakarta Int Hotels |
| Pelat Timah Nusantara |
Jakarta Int and Pelat Timah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Pelat Timah
The main advantage of trading using opposite Jakarta Int and Pelat Timah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Pelat Timah 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 Pelat Timah will offset losses from the drop in Pelat Timah'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 |
| Pelat Timah vs. Timah Persero Tbk | Pelat Timah vs. Semen Indonesia Persero | Pelat Timah vs. Mitra Pinasthika Mustika | Pelat Timah 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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