Correlation Between Japfa Comfeed and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Japfa Comfeed and PT Sarana 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 PT Sarana 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 PT Sarana Menara, you can compare the effects of market volatilities on Japfa Comfeed and PT Sarana 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 PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japfa Comfeed and PT Sarana.
Diversification Opportunities for Japfa Comfeed and PT Sarana
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Japfa and TOWR is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Japfa Comfeed Indonesia and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara 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 PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Japfa Comfeed i.e., Japfa Comfeed and PT Sarana go up and down completely randomly.
Pair Corralation between Japfa Comfeed and PT Sarana
Assuming the 90 days trading horizon Japfa Comfeed Indonesia is expected to generate 0.68 times more return on investment than PT Sarana. However, Japfa Comfeed Indonesia is 1.46 times less risky than PT Sarana. It trades about 0.15 of its potential returns per unit of risk. PT Sarana Menara is currently generating about 0.07 per unit of risk. If you would invest 188,500 in Japfa Comfeed Indonesia on November 3, 2024 and sell it today you would earn a total of 12,500 from holding Japfa Comfeed Indonesia or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japfa Comfeed Indonesia vs. PT Sarana Menara
Performance |
| Timeline |
| Japfa Comfeed Indonesia |
| PT Sarana Menara |
Japfa Comfeed and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japfa Comfeed and PT Sarana
The main advantage of trading using opposite Japfa Comfeed and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japfa Comfeed position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana'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 |
| PT Sarana vs. Tower Bersama Infrastructure | PT Sarana vs. Merdeka Copper Gold | PT Sarana vs. XL Axiata Tbk | PT Sarana vs. Japfa Comfeed Indonesia |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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