Correlation Between Jaya Real and Metropolitan Land
Can any of the company-specific risk be diversified away by investing in both Jaya Real and Metropolitan Land 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 Land 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 Land Tbk, you can compare the effects of market volatilities on Jaya Real and Metropolitan Land 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 Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaya Real and Metropolitan Land.
Diversification Opportunities for Jaya Real and Metropolitan Land
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jaya and Metropolitan is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Real Property and Metropolitan Land Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Land 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 Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Land Tbk has no effect on the direction of Jaya Real i.e., Jaya Real and Metropolitan Land go up and down completely randomly.
Pair Corralation between Jaya Real and Metropolitan Land
Assuming the 90 days trading horizon Jaya Real Property is expected to generate 0.52 times more return on investment than Metropolitan Land. However, Jaya Real Property is 1.93 times less risky than Metropolitan Land. It trades about 0.12 of its potential returns per unit of risk. Metropolitan Land Tbk is currently generating about 0.02 per unit of risk. If you would invest 45,355 in Jaya Real Property on November 5, 2024 and sell it today you would earn a total of 28,645 from holding Jaya Real Property or generate 63.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Jaya Real Property vs. Metropolitan Land Tbk
Performance |
| Timeline |
| Jaya Real Property |
| Metropolitan Land Tbk |
Jaya Real and Metropolitan Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaya Real and Metropolitan Land
The main advantage of trading using opposite Jaya Real and Metropolitan Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaya Real position performs unexpectedly, Metropolitan Land 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 Land will offset losses from the drop in Metropolitan Land'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 Land vs. Jaya Real Property | Metropolitan Land vs. Intiland Development Tbk | Metropolitan Land vs. Modernland Realty Ltd | Metropolitan Land vs. Lippo Cikarang Tbk |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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