Correlation Between Jasuindo Tiga and Midi Utama
Can any of the company-specific risk be diversified away by investing in both Jasuindo Tiga and Midi Utama 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 Jasuindo Tiga and Midi Utama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jasuindo Tiga Perkasa and Midi Utama Indonesia, you can compare the effects of market volatilities on Jasuindo Tiga and Midi Utama 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 Jasuindo Tiga with a short position of Midi Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jasuindo Tiga and Midi Utama.
Diversification Opportunities for Jasuindo Tiga and Midi Utama
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jasuindo and Midi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Jasuindo Tiga Perkasa and Midi Utama Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midi Utama Indonesia and Jasuindo Tiga 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 Jasuindo Tiga Perkasa are associated (or correlated) with Midi Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midi Utama Indonesia has no effect on the direction of Jasuindo Tiga i.e., Jasuindo Tiga and Midi Utama go up and down completely randomly.
Pair Corralation between Jasuindo Tiga and Midi Utama
Assuming the 90 days trading horizon Jasuindo Tiga Perkasa is expected to under-perform the Midi Utama. In addition to that, Jasuindo Tiga is 1.15 times more volatile than Midi Utama Indonesia. It trades about -0.24 of its total potential returns per unit of risk. Midi Utama Indonesia is currently generating about -0.17 per unit of volatility. If you would invest 48,000 in Midi Utama Indonesia on August 29, 2024 and sell it today you would lose (5,600) from holding Midi Utama Indonesia or give up 11.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jasuindo Tiga Perkasa vs. Midi Utama Indonesia
Performance |
| Timeline |
| Jasuindo Tiga Perkasa |
| Midi Utama Indonesia |
Jasuindo Tiga and Midi Utama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jasuindo Tiga and Midi Utama
The main advantage of trading using opposite Jasuindo Tiga and Midi Utama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jasuindo Tiga position performs unexpectedly, Midi Utama 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 Midi Utama will offset losses from the drop in Midi Utama's long position.| Jasuindo Tiga vs. Jakarta Setiabudi Internasional | Jasuindo Tiga vs. Intraco Penta Tbk | Jasuindo Tiga vs. Multi Indocitra Tbk | Jasuindo Tiga vs. Inter Delta Tbk |
| Midi Utama vs. Sumber Alfaria Trijaya | Midi Utama vs. Hero Supermarket Tbk | Midi Utama vs. Supra Boga Lestari | Midi Utama vs. Multi Indocitra 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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