Correlation Between Jasa Marga and United Tractors
Can any of the company-specific risk be diversified away by investing in both Jasa Marga and United Tractors 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 Jasa Marga and United Tractors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jasa Marga Tbk and United Tractors Tbk, you can compare the effects of market volatilities on Jasa Marga and United Tractors 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 Jasa Marga with a short position of United Tractors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jasa Marga and United Tractors.
Diversification Opportunities for Jasa Marga and United Tractors
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jasa and United is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jasa Marga Tbk and United Tractors Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Tractors Tbk and Jasa Marga 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 Jasa Marga Tbk are associated (or correlated) with United Tractors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Tractors Tbk has no effect on the direction of Jasa Marga i.e., Jasa Marga and United Tractors go up and down completely randomly.
Pair Corralation between Jasa Marga and United Tractors
Assuming the 90 days trading horizon Jasa Marga Tbk is expected to under-perform the United Tractors. In addition to that, Jasa Marga is 1.18 times more volatile than United Tractors Tbk. It trades about -0.1 of its total potential returns per unit of risk. United Tractors Tbk is currently generating about -0.08 per unit of volatility. If you would invest 2,557,500 in United Tractors Tbk on November 4, 2024 and sell it today you would lose (65,000) from holding United Tractors Tbk or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jasa Marga Tbk vs. United Tractors Tbk
Performance |
| Timeline |
| Jasa Marga Tbk |
| United Tractors Tbk |
Jasa Marga and United Tractors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jasa Marga and United Tractors
The main advantage of trading using opposite Jasa Marga and United Tractors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jasa Marga position performs unexpectedly, United Tractors 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 United Tractors will offset losses from the drop in United Tractors' long position.| Jasa Marga vs. Semen Indonesia Persero | Jasa Marga vs. Wijaya Karya Beton | Jasa Marga vs. Perusahaan Gas Negara | Jasa Marga vs. PT Indofood Sukses |
| United Tractors vs. Resource Alam Indonesia | United Tractors vs. J Resources Asia | United Tractors vs. TBS Energi Utama | United Tractors vs. Rukun Raharja 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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