Correlation Between Jakarta Int and Transcoal Pacific
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Transcoal Pacific 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 Transcoal Pacific 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 Transcoal Pacific Tbk, you can compare the effects of market volatilities on Jakarta Int and Transcoal Pacific 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 Transcoal Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Transcoal Pacific.
Diversification Opportunities for Jakarta Int and Transcoal Pacific
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jakarta and Transcoal is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Transcoal Pacific Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcoal Pacific 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 Transcoal Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcoal Pacific Tbk has no effect on the direction of Jakarta Int i.e., Jakarta Int and Transcoal Pacific go up and down completely randomly.
Pair Corralation between Jakarta Int and Transcoal Pacific
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 5.09 times more return on investment than Transcoal Pacific. However, Jakarta Int is 5.09 times more volatile than Transcoal Pacific Tbk. It trades about 0.25 of its potential returns per unit of risk. Transcoal Pacific Tbk is currently generating about 0.0 per unit of risk. If you would invest 118,500 in Jakarta Int Hotels on September 13, 2024 and sell it today you would earn a total of 77,000 from holding Jakarta Int Hotels or generate 64.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Transcoal Pacific Tbk
Performance |
| Timeline |
| Jakarta Int Hotels |
| Transcoal Pacific Tbk |
Jakarta Int and Transcoal Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Transcoal Pacific
The main advantage of trading using opposite Jakarta Int and Transcoal Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Transcoal Pacific 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 Transcoal Pacific will offset losses from the drop in Transcoal Pacific'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 |
| Transcoal Pacific vs. PT Indonesia Kendaraan | Transcoal Pacific vs. Surya Toto Indonesia | Transcoal Pacific vs. Mitra Pinasthika Mustika | Transcoal Pacific vs. Integra Indocabinet 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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