Correlation Between Kencana Energi and Jaya Sukses
Can any of the company-specific risk be diversified away by investing in both Kencana Energi and Jaya Sukses 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 Kencana Energi and Jaya Sukses into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kencana Energi Lestari and Jaya Sukses Makmur, you can compare the effects of market volatilities on Kencana Energi and Jaya Sukses 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 Kencana Energi with a short position of Jaya Sukses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kencana Energi and Jaya Sukses.
Diversification Opportunities for Kencana Energi and Jaya Sukses
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kencana and Jaya is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kencana Energi Lestari and Jaya Sukses Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Sukses Makmur and Kencana Energi 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 Kencana Energi Lestari are associated (or correlated) with Jaya Sukses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Sukses Makmur has no effect on the direction of Kencana Energi i.e., Kencana Energi and Jaya Sukses go up and down completely randomly.
Pair Corralation between Kencana Energi and Jaya Sukses
Assuming the 90 days trading horizon Kencana Energi is expected to generate 3.1 times less return on investment than Jaya Sukses. In addition to that, Kencana Energi is 5.98 times more volatile than Jaya Sukses Makmur. It trades about 0.0 of its total potential returns per unit of risk. Jaya Sukses Makmur is currently generating about 0.05 per unit of volatility. If you would invest 93,000 in Jaya Sukses Makmur on September 1, 2024 and sell it today you would earn a total of 7,000 from holding Jaya Sukses Makmur or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kencana Energi Lestari vs. Jaya Sukses Makmur
Performance |
| Timeline |
| Kencana Energi Lestari |
| Jaya Sukses Makmur |
Kencana Energi and Jaya Sukses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kencana Energi and Jaya Sukses
The main advantage of trading using opposite Kencana Energi and Jaya Sukses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kencana Energi position performs unexpectedly, Jaya Sukses 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 Jaya Sukses will offset losses from the drop in Jaya Sukses' long position.| Kencana Energi vs. PT Indonesia Kendaraan | Kencana Energi vs. Cikarang Listrindo Tbk | Kencana Energi vs. Jasa Armada Indonesia | Kencana Energi vs. Pelita Samudera Shipping |
| Jaya Sukses vs. Matahari Department Store | Jaya Sukses vs. Multi Medika Internasional | Jaya Sukses vs. Visi Media Asia | Jaya Sukses vs. Bayan Resources 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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