Correlation Between Jakarta Setiabudi and Gema Grahasarana
Can any of the company-specific risk be diversified away by investing in both Jakarta Setiabudi and Gema Grahasarana 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 Gema Grahasarana 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 Gema Grahasarana Tbk, you can compare the effects of market volatilities on Jakarta Setiabudi and Gema Grahasarana 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 Gema Grahasarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Setiabudi and Gema Grahasarana.
Diversification Opportunities for Jakarta Setiabudi and Gema Grahasarana
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jakarta and Gema is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Setiabudi Internasiona and Gema Grahasarana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gema Grahasarana Tbk 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 Gema Grahasarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gema Grahasarana Tbk has no effect on the direction of Jakarta Setiabudi i.e., Jakarta Setiabudi and Gema Grahasarana go up and down completely randomly.
Pair Corralation between Jakarta Setiabudi and Gema Grahasarana
Assuming the 90 days trading horizon Jakarta Setiabudi Internasional is expected to generate 5.39 times more return on investment than Gema Grahasarana. However, Jakarta Setiabudi is 5.39 times more volatile than Gema Grahasarana Tbk. It trades about 0.28 of its potential returns per unit of risk. Gema Grahasarana Tbk is currently generating about -0.27 per unit of risk. If you would invest 438,000 in Jakarta Setiabudi Internasional on August 30, 2024 and sell it today you would earn a total of 359,500 from holding Jakarta Setiabudi Internasional or generate 82.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Setiabudi Internasiona vs. Gema Grahasarana Tbk
Performance |
| Timeline |
| Jakarta Setiabudi |
| Gema Grahasarana Tbk |
Jakarta Setiabudi and Gema Grahasarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Setiabudi and Gema Grahasarana
The main advantage of trading using opposite Jakarta Setiabudi and Gema Grahasarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Setiabudi position performs unexpectedly, Gema Grahasarana 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 Gema Grahasarana will offset losses from the drop in Gema Grahasarana's long position.| Jakarta Setiabudi vs. Jasuindo Tiga Perkasa | Jakarta Setiabudi vs. Jakarta Int Hotels | Jakarta Setiabudi vs. Inter Delta Tbk | Jakarta Setiabudi vs. Pudjiadi Sons Tbk |
| Gema Grahasarana vs. Fortune Indonesia Tbk | Gema Grahasarana vs. Fks Multi Agro | Gema Grahasarana vs. Bayu Buana Tbk | Gema Grahasarana vs. Fast Food Indonesia |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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