Correlation Between Japfa Comfeed and Bintang Oto
Can any of the company-specific risk be diversified away by investing in both Japfa Comfeed and Bintang Oto 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 Japfa Comfeed and Bintang Oto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japfa Comfeed Indonesia and Bintang Oto Global, you can compare the effects of market volatilities on Japfa Comfeed and Bintang Oto 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 Japfa Comfeed with a short position of Bintang Oto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japfa Comfeed and Bintang Oto.
Diversification Opportunities for Japfa Comfeed and Bintang Oto
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Japfa and Bintang is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Japfa Comfeed Indonesia and Bintang Oto Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Oto Global and Japfa Comfeed 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 Japfa Comfeed Indonesia are associated (or correlated) with Bintang Oto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Oto Global has no effect on the direction of Japfa Comfeed i.e., Japfa Comfeed and Bintang Oto go up and down completely randomly.
Pair Corralation between Japfa Comfeed and Bintang Oto
Assuming the 90 days trading horizon Japfa Comfeed Indonesia is expected to generate 1.58 times more return on investment than Bintang Oto. However, Japfa Comfeed is 1.58 times more volatile than Bintang Oto Global. It trades about -0.05 of its potential returns per unit of risk. Bintang Oto Global is currently generating about -0.23 per unit of risk. If you would invest 175,000 in Japfa Comfeed Indonesia on September 2, 2024 and sell it today you would lose (3,500) from holding Japfa Comfeed Indonesia or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japfa Comfeed Indonesia vs. Bintang Oto Global
Performance |
| Timeline |
| Japfa Comfeed Indonesia |
| Bintang Oto Global |
Japfa Comfeed and Bintang Oto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japfa Comfeed and Bintang Oto
The main advantage of trading using opposite Japfa Comfeed and Bintang Oto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japfa Comfeed position performs unexpectedly, Bintang Oto 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 Bintang Oto will offset losses from the drop in Bintang Oto's long position.| Japfa Comfeed vs. Bank BRISyariah Tbk | Japfa Comfeed vs. Mitra Pinasthika Mustika | Japfa Comfeed vs. Jakarta Int Hotels | Japfa Comfeed vs. Indosterling Technomedia Tbk |
| Bintang Oto vs. Japfa Comfeed Indonesia | Bintang Oto vs. Charoen Pokphand Indonesia | Bintang Oto vs. Erajaya Swasembada Tbk | Bintang Oto vs. Indofood Cbp Sukses |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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