Correlation Between Jakarta Setiabudi and Fast Food
Can any of the company-specific risk be diversified away by investing in both Jakarta Setiabudi and Fast Food 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 Jakarta Setiabudi and Fast Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jakarta Setiabudi Internasional and Fast Food Indonesia, you can compare the effects of market volatilities on Jakarta Setiabudi and Fast Food 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 Jakarta Setiabudi with a short position of Fast Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Setiabudi and Fast Food.
Diversification Opportunities for Jakarta Setiabudi and Fast Food
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jakarta and Fast is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Setiabudi Internasiona and Fast Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Food Indonesia and Jakarta Setiabudi 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 Jakarta Setiabudi Internasional are associated (or correlated) with Fast Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Food Indonesia has no effect on the direction of Jakarta Setiabudi i.e., Jakarta Setiabudi and Fast Food go up and down completely randomly.
Pair Corralation between Jakarta Setiabudi and Fast Food
Assuming the 90 days trading horizon Jakarta Setiabudi Internasional is expected to generate 5.18 times more return on investment than Fast Food. However, Jakarta Setiabudi is 5.18 times more volatile than Fast Food Indonesia. It trades about 0.29 of its potential returns per unit of risk. Fast Food Indonesia is currently generating about -0.27 per unit of risk. If you would invest 180,500 in Jakarta Setiabudi Internasional on September 3, 2024 and sell it today you would earn a total of 764,500 from holding Jakarta Setiabudi Internasional or generate 423.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Setiabudi Internasiona vs. Fast Food Indonesia
Performance |
| Timeline |
| Jakarta Setiabudi |
| Fast Food Indonesia |
Jakarta Setiabudi and Fast Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Setiabudi and Fast Food
The main advantage of trading using opposite Jakarta Setiabudi and Fast Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Setiabudi position performs unexpectedly, Fast Food 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 Fast Food will offset losses from the drop in Fast Food's long position.| Jakarta Setiabudi vs. Mitra Pinasthika Mustika | Jakarta Setiabudi vs. Jakarta Int Hotels | Jakarta Setiabudi vs. Asuransi Harta Aman | Jakarta Setiabudi vs. Indosterling Technomedia Tbk |
| Fast Food vs. Mitra Pinasthika Mustika | Fast Food vs. Jakarta Int Hotels | Fast Food vs. Asuransi Harta Aman | Fast Food vs. Indosterling Technomedia 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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