Correlation Between Hoffmen Cleanindo and PT Jobubu

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Can any of the company-specific risk be diversified away by investing in both Hoffmen Cleanindo and PT Jobubu 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 Hoffmen Cleanindo and PT Jobubu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoffmen Cleanindo and PT Jobubu Jarum, you can compare the effects of market volatilities on Hoffmen Cleanindo and PT Jobubu 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 Hoffmen Cleanindo with a short position of PT Jobubu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoffmen Cleanindo and PT Jobubu.

Diversification Opportunities for Hoffmen Cleanindo and PT Jobubu

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Hoffmen and BEER is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hoffmen Cleanindo and PT Jobubu Jarum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Jobubu Jarum and Hoffmen Cleanindo 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 Hoffmen Cleanindo are associated (or correlated) with PT Jobubu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Jobubu Jarum has no effect on the direction of Hoffmen Cleanindo i.e., Hoffmen Cleanindo and PT Jobubu go up and down completely randomly.

Pair Corralation between Hoffmen Cleanindo and PT Jobubu

Assuming the 90 days trading horizon Hoffmen Cleanindo is expected to generate 1.65 times more return on investment than PT Jobubu. However, Hoffmen Cleanindo is 1.65 times more volatile than PT Jobubu Jarum. It trades about -0.01 of its potential returns per unit of risk. PT Jobubu Jarum is currently generating about -0.07 per unit of risk. If you would invest  23,600  in Hoffmen Cleanindo on August 27, 2024 and sell it today you would lose (6,900) from holding Hoffmen Cleanindo or give up 29.24% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hoffmen Cleanindo  vs.  PT Jobubu Jarum

 Performance 
       Timeline  
Hoffmen Cleanindo 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days Hoffmen Cleanindo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Hoffmen Cleanindo is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
PT Jobubu Jarum 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days PT Jobubu Jarum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Hoffmen Cleanindo and PT Jobubu Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hoffmen Cleanindo and PT Jobubu

The main advantage of trading using opposite Hoffmen Cleanindo and PT Jobubu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoffmen Cleanindo position performs unexpectedly, PT Jobubu 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 PT Jobubu will offset losses from the drop in PT Jobubu's long position.
The idea behind Hoffmen Cleanindo and PT Jobubu Jarum pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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