Correlation Between Jaya Konstruksi and PP Presisi
Can any of the company-specific risk be diversified away by investing in both Jaya Konstruksi and PP Presisi 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 Jaya Konstruksi and PP Presisi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaya Konstruksi Manggala and PP Presisi Tbk, you can compare the effects of market volatilities on Jaya Konstruksi and PP Presisi 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 Jaya Konstruksi with a short position of PP Presisi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaya Konstruksi and PP Presisi.
Diversification Opportunities for Jaya Konstruksi and PP Presisi
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jaya and PPRE is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Konstruksi Manggala and PP Presisi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PP Presisi Tbk and Jaya Konstruksi 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 Jaya Konstruksi Manggala are associated (or correlated) with PP Presisi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PP Presisi Tbk has no effect on the direction of Jaya Konstruksi i.e., Jaya Konstruksi and PP Presisi go up and down completely randomly.
Pair Corralation between Jaya Konstruksi and PP Presisi
Assuming the 90 days trading horizon Jaya Konstruksi Manggala is expected to generate 0.69 times more return on investment than PP Presisi. However, Jaya Konstruksi Manggala is 1.44 times less risky than PP Presisi. It trades about -0.28 of its potential returns per unit of risk. PP Presisi Tbk is currently generating about -0.33 per unit of risk. If you would invest 9,800 in Jaya Konstruksi Manggala on September 2, 2024 and sell it today you would lose (1,100) from holding Jaya Konstruksi Manggala or give up 11.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jaya Konstruksi Manggala vs. PP Presisi Tbk
Performance |
| Timeline |
| Jaya Konstruksi Manggala |
| PP Presisi Tbk |
Jaya Konstruksi and PP Presisi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaya Konstruksi and PP Presisi
The main advantage of trading using opposite Jaya Konstruksi and PP Presisi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaya Konstruksi position performs unexpectedly, PP Presisi 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 PP Presisi will offset losses from the drop in PP Presisi's long position.| Jaya Konstruksi vs. Jaya Real Property | Jaya Konstruksi vs. Perdana Gapura Prima | Jaya Konstruksi vs. Jakarta Int Hotels | Jaya Konstruksi vs. Mnc Land Tbk |
| PP Presisi vs. Matahari Department Store | PP Presisi vs. Multi Medika Internasional | PP Presisi vs. Visi Media Asia | PP Presisi vs. Bayan Resources 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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