Correlation Between Japfa Comfeed and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Japfa Comfeed and Asia Pacific 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 Asia Pacific 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 Asia Pacific Fibers, you can compare the effects of market volatilities on Japfa Comfeed and Asia Pacific 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 Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japfa Comfeed and Asia Pacific.
Diversification Opportunities for Japfa Comfeed and Asia Pacific
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japfa and Asia is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Japfa Comfeed Indonesia and Asia Pacific Fibers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Fibers 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 Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Fibers has no effect on the direction of Japfa Comfeed i.e., Japfa Comfeed and Asia Pacific go up and down completely randomly.
Pair Corralation between Japfa Comfeed and Asia Pacific
Assuming the 90 days trading horizon Japfa Comfeed Indonesia is expected to under-perform the Asia Pacific. But the stock apears to be less risky and, when comparing its historical volatility, Japfa Comfeed Indonesia is 2.2 times less risky than Asia Pacific. The stock trades about -0.15 of its potential returns per unit of risk. The Asia Pacific Fibers is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,900 in Asia Pacific Fibers on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Asia Pacific Fibers or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japfa Comfeed Indonesia vs. Asia Pacific Fibers
Performance |
| Timeline |
| Japfa Comfeed Indonesia |
| Asia Pacific Fibers |
Japfa Comfeed and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japfa Comfeed and Asia Pacific
The main advantage of trading using opposite Japfa Comfeed and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japfa Comfeed position performs unexpectedly, Asia Pacific 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 Asia Pacific will offset losses from the drop in Asia Pacific'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 |
| Asia Pacific vs. Japfa Comfeed Indonesia | Asia Pacific vs. Charoen Pokphand Indonesia | Asia Pacific vs. Erajaya Swasembada Tbk | Asia Pacific 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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