Correlation Between Jaya Real and Metropolitan Kentjana
Can any of the company-specific risk be diversified away by investing in both Jaya Real and Metropolitan Kentjana 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 Metropolitan Kentjana 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 Metropolitan Kentjana Tbk, you can compare the effects of market volatilities on Jaya Real and Metropolitan Kentjana 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 Metropolitan Kentjana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaya Real and Metropolitan Kentjana.
Diversification Opportunities for Jaya Real and Metropolitan Kentjana
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jaya and Metropolitan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Real Property and Metropolitan Kentjana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Kentjana Tbk 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 Metropolitan Kentjana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Kentjana Tbk has no effect on the direction of Jaya Real i.e., Jaya Real and Metropolitan Kentjana go up and down completely randomly.
Pair Corralation between Jaya Real and Metropolitan Kentjana
Assuming the 90 days trading horizon Jaya Real Property is expected to generate 0.67 times more return on investment than Metropolitan Kentjana. However, Jaya Real Property is 1.5 times less risky than Metropolitan Kentjana. It trades about 0.09 of its potential returns per unit of risk. Metropolitan Kentjana Tbk is currently generating about 0.0 per unit of risk. If you would invest 47,206 in Jaya Real Property on August 29, 2024 and sell it today you would earn a total of 18,294 from holding Jaya Real Property or generate 38.75% 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. Metropolitan Kentjana Tbk
Performance |
| Timeline |
| Jaya Real Property |
| Metropolitan Kentjana Tbk |
Jaya Real and Metropolitan Kentjana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaya Real and Metropolitan Kentjana
The main advantage of trading using opposite Jaya Real and Metropolitan Kentjana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaya Real position performs unexpectedly, Metropolitan Kentjana 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 Metropolitan Kentjana will offset losses from the drop in Metropolitan Kentjana'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 |
| Metropolitan Kentjana vs. Jaya Real Property | Metropolitan Kentjana vs. Metropolitan Land Tbk | Metropolitan Kentjana vs. Duta Pertiwi Tbk | Metropolitan Kentjana vs. Indonesia Prima Property |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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