Correlation Between Japfa Comfeed and Hartadinata Abadi
Can any of the company-specific risk be diversified away by investing in both Japfa Comfeed and Hartadinata Abadi 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 Hartadinata Abadi 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 Hartadinata Abadi Tbk, you can compare the effects of market volatilities on Japfa Comfeed and Hartadinata Abadi 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 Hartadinata Abadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japfa Comfeed and Hartadinata Abadi.
Diversification Opportunities for Japfa Comfeed and Hartadinata Abadi
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Japfa and Hartadinata is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Japfa Comfeed Indonesia and Hartadinata Abadi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartadinata Abadi Tbk 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 Hartadinata Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartadinata Abadi Tbk has no effect on the direction of Japfa Comfeed i.e., Japfa Comfeed and Hartadinata Abadi go up and down completely randomly.
Pair Corralation between Japfa Comfeed and Hartadinata Abadi
Assuming the 90 days trading horizon Japfa Comfeed Indonesia is expected to generate 0.89 times more return on investment than Hartadinata Abadi. However, Japfa Comfeed Indonesia is 1.12 times less risky than Hartadinata Abadi. It trades about -0.05 of its potential returns per unit of risk. Hartadinata Abadi Tbk is currently generating about -0.49 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japfa Comfeed Indonesia vs. Hartadinata Abadi Tbk
Performance |
| Timeline |
| Japfa Comfeed Indonesia |
| Hartadinata Abadi Tbk |
Japfa Comfeed and Hartadinata Abadi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japfa Comfeed and Hartadinata Abadi
The main advantage of trading using opposite Japfa Comfeed and Hartadinata Abadi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japfa Comfeed position performs unexpectedly, Hartadinata Abadi 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 Hartadinata Abadi will offset losses from the drop in Hartadinata Abadi'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 |
| Hartadinata Abadi vs. Japfa Comfeed Indonesia | Hartadinata Abadi vs. Charoen Pokphand Indonesia | Hartadinata Abadi vs. Erajaya Swasembada Tbk | Hartadinata Abadi 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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