Correlation Between First Media and Jasuindo Tiga
Can any of the company-specific risk be diversified away by investing in both First Media and Jasuindo Tiga 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 First Media and Jasuindo Tiga into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Media Tbk and Jasuindo Tiga Perkasa, you can compare the effects of market volatilities on First Media and Jasuindo Tiga 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 First Media with a short position of Jasuindo Tiga. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Media and Jasuindo Tiga.
Diversification Opportunities for First Media and Jasuindo Tiga
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Jasuindo is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding First Media Tbk and Jasuindo Tiga Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasuindo Tiga Perkasa and First Media 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 First Media Tbk are associated (or correlated) with Jasuindo Tiga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasuindo Tiga Perkasa has no effect on the direction of First Media i.e., First Media and Jasuindo Tiga go up and down completely randomly.
Pair Corralation between First Media and Jasuindo Tiga
Assuming the 90 days trading horizon First Media Tbk is expected to generate 1.4 times more return on investment than Jasuindo Tiga. However, First Media is 1.4 times more volatile than Jasuindo Tiga Perkasa. It trades about 0.03 of its potential returns per unit of risk. Jasuindo Tiga Perkasa is currently generating about 0.01 per unit of risk. If you would invest 7,400 in First Media Tbk on November 27, 2024 and sell it today you would earn a total of 1,100 from holding First Media Tbk or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Media Tbk vs. Jasuindo Tiga Perkasa
Performance |
| Timeline |
| First Media Tbk |
| Jasuindo Tiga Perkasa |
First Media and Jasuindo Tiga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Media and Jasuindo Tiga
The main advantage of trading using opposite First Media and Jasuindo Tiga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Media position performs unexpectedly, Jasuindo Tiga 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 Jasuindo Tiga will offset losses from the drop in Jasuindo Tiga's long position.| First Media vs. Metro Healthcare Indonesia | First Media vs. Indosterling Technomedia Tbk | First Media vs. Anabatic Technologies Tbk | First Media vs. PT Hatten Bali |
| Jasuindo Tiga vs. Jakarta Setiabudi Internasional | Jasuindo Tiga vs. Intraco Penta Tbk | Jasuindo Tiga vs. Multi Indocitra Tbk | Jasuindo Tiga vs. Inter Delta 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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