Correlation Between Japfa Comfeed and Jakarta Setiabudi
Can any of the company-specific risk be diversified away by investing in both Japfa Comfeed and Jakarta Setiabudi 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 Jakarta Setiabudi 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 Jakarta Setiabudi Internasional, you can compare the effects of market volatilities on Japfa Comfeed and Jakarta Setiabudi 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 Jakarta Setiabudi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japfa Comfeed and Jakarta Setiabudi.
Diversification Opportunities for Japfa Comfeed and Jakarta Setiabudi
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Japfa and Jakarta is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Japfa Comfeed Indonesia and Jakarta Setiabudi Internasiona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jakarta Setiabudi 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 Jakarta Setiabudi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jakarta Setiabudi has no effect on the direction of Japfa Comfeed i.e., Japfa Comfeed and Jakarta Setiabudi go up and down completely randomly.
Pair Corralation between Japfa Comfeed and Jakarta Setiabudi
Assuming the 90 days trading horizon Japfa Comfeed is expected to generate 6.99 times less return on investment than Jakarta Setiabudi. But when comparing it to its historical volatility, Japfa Comfeed Indonesia is 4.41 times less risky than Jakarta Setiabudi. It trades about 0.22 of its potential returns per unit of risk. Jakarta Setiabudi Internasional is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 237,000 in Jakarta Setiabudi Internasional on August 31, 2024 and sell it today you would earn a total of 718,000 from holding Jakarta Setiabudi Internasional or generate 302.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japfa Comfeed Indonesia vs. Jakarta Setiabudi Internasiona
Performance |
| Timeline |
| Japfa Comfeed Indonesia |
| Jakarta Setiabudi |
Japfa Comfeed and Jakarta Setiabudi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japfa Comfeed and Jakarta Setiabudi
The main advantage of trading using opposite Japfa Comfeed and Jakarta Setiabudi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japfa Comfeed position performs unexpectedly, Jakarta Setiabudi 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 Jakarta Setiabudi will offset losses from the drop in Jakarta Setiabudi's long position.| Japfa Comfeed vs. Charoen Pokphand Indonesia | Japfa Comfeed vs. Kalbe Farma Tbk | Japfa Comfeed vs. Indofood Cbp Sukses | Japfa Comfeed vs. PT Indofood Sukses |
| Jakarta Setiabudi vs. Japfa Comfeed Indonesia | Jakarta Setiabudi vs. Charoen Pokphand Indonesia | Jakarta Setiabudi vs. Erajaya Swasembada Tbk | Jakarta Setiabudi 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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