Correlation Between Metropolitan Kentjana and Jaya Real
Can any of the company-specific risk be diversified away by investing in both Metropolitan Kentjana and Jaya Real 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 Metropolitan Kentjana and Jaya Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan Kentjana Tbk and Jaya Real Property, you can compare the effects of market volatilities on Metropolitan Kentjana and Jaya Real 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 Metropolitan Kentjana with a short position of Jaya Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Kentjana and Jaya Real.
Diversification Opportunities for Metropolitan Kentjana and Jaya Real
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Metropolitan and Jaya is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Kentjana Tbk and Jaya Real Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Real Property and Metropolitan Kentjana 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 Metropolitan Kentjana Tbk are associated (or correlated) with Jaya Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Real Property has no effect on the direction of Metropolitan Kentjana i.e., Metropolitan Kentjana and Jaya Real go up and down completely randomly.
Pair Corralation between Metropolitan Kentjana and Jaya Real
Assuming the 90 days trading horizon Metropolitan Kentjana Tbk is expected to generate 2.29 times more return on investment than Jaya Real. However, Metropolitan Kentjana is 2.29 times more volatile than Jaya Real Property. It trades about 0.0 of its potential returns per unit of risk. Jaya Real Property is currently generating about -0.05 per unit of risk. If you would invest 2,600,000 in Metropolitan Kentjana Tbk on September 1, 2024 and sell it today you would lose (5,000) from holding Metropolitan Kentjana Tbk or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Metropolitan Kentjana Tbk vs. Jaya Real Property
Performance |
| Timeline |
| Metropolitan Kentjana Tbk |
| Jaya Real Property |
Metropolitan Kentjana and Jaya Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Kentjana and Jaya Real
The main advantage of trading using opposite Metropolitan Kentjana and Jaya Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Kentjana position performs unexpectedly, Jaya Real 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 Real will offset losses from the drop in Jaya Real's long position.| Metropolitan Kentjana vs. Lippo Cikarang Tbk | Metropolitan Kentjana vs. Lippo Karawaci Tbk | Metropolitan Kentjana vs. Mitra Pinasthika Mustika | Metropolitan Kentjana vs. Jakarta Int Hotels |
| Jaya Real vs. Lippo Cikarang Tbk | Jaya Real vs. Duta Pertiwi Tbk | Jaya Real vs. Intiland Development Tbk | Jaya Real vs. Mnc Land 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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