Correlation Between Jaya Real and Bekasi Fajar
Can any of the company-specific risk be diversified away by investing in both Jaya Real and Bekasi Fajar 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 Jaya Real and Bekasi Fajar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaya Real Property and Bekasi Fajar Industrial, you can compare the effects of market volatilities on Jaya Real and Bekasi Fajar 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 Jaya Real with a short position of Bekasi Fajar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaya Real and Bekasi Fajar.
Diversification Opportunities for Jaya Real and Bekasi Fajar
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jaya and Bekasi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Real Property and Bekasi Fajar Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bekasi Fajar Industrial and Jaya Real 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 Jaya Real Property are associated (or correlated) with Bekasi Fajar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bekasi Fajar Industrial has no effect on the direction of Jaya Real i.e., Jaya Real and Bekasi Fajar go up and down completely randomly.
Pair Corralation between Jaya Real and Bekasi Fajar
Assuming the 90 days trading horizon Jaya Real is expected to generate 2.91 times less return on investment than Bekasi Fajar. But when comparing it to its historical volatility, Jaya Real Property is 2.89 times less risky than Bekasi Fajar. It trades about 0.02 of its potential returns per unit of risk. Bekasi Fajar Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,200 in Bekasi Fajar Industrial on September 1, 2024 and sell it today you would earn a total of 200.00 from holding Bekasi Fajar Industrial or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jaya Real Property vs. Bekasi Fajar Industrial
Performance |
| Timeline |
| Jaya Real Property |
| Bekasi Fajar Industrial |
Jaya Real and Bekasi Fajar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaya Real and Bekasi Fajar
The main advantage of trading using opposite Jaya Real and Bekasi Fajar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaya Real position performs unexpectedly, Bekasi Fajar 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 Bekasi Fajar will offset losses from the drop in Bekasi Fajar's long position.| Jaya Real vs. Lippo Cikarang Tbk | Jaya Real vs. Duta Pertiwi Tbk | Jaya Real vs. Intiland Development Tbk | Jaya Real vs. Mnc Land Tbk |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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