Correlation Between Jakarta Int and Kapuas Prima
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Kapuas Prima 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 Kapuas Prima 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 Kapuas Prima Coal, you can compare the effects of market volatilities on Jakarta Int and Kapuas Prima 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 Kapuas Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Kapuas Prima.
Diversification Opportunities for Jakarta Int and Kapuas Prima
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jakarta and Kapuas is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Kapuas Prima Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kapuas Prima Coal 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 Kapuas Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kapuas Prima Coal has no effect on the direction of Jakarta Int i.e., Jakarta Int and Kapuas Prima go up and down completely randomly.
Pair Corralation between Jakarta Int and Kapuas Prima
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 1.27 times more return on investment than Kapuas Prima. However, Jakarta Int is 1.27 times more volatile than Kapuas Prima Coal. It trades about 0.1 of its potential returns per unit of risk. Kapuas Prima Coal is currently generating about -0.05 per unit of risk. If you would invest 35,200 in Jakarta Int Hotels on September 13, 2024 and sell it today you would earn a total of 160,300 from holding Jakarta Int Hotels or generate 455.4% 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. Kapuas Prima Coal
Performance |
| Timeline |
| Jakarta Int Hotels |
| Kapuas Prima Coal |
Jakarta Int and Kapuas Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Kapuas Prima
The main advantage of trading using opposite Jakarta Int and Kapuas Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Kapuas Prima 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 Kapuas Prima will offset losses from the drop in Kapuas Prima'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 |
| Kapuas Prima vs. Merdeka Copper Gold | Kapuas Prima vs. J Resources Asia | Kapuas Prima vs. Central Omega Resources | Kapuas Prima vs. Puradelta Lestari PT |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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