Correlation Between PAM Mineral and Jaya Swarasa
Can any of the company-specific risk be diversified away by investing in both PAM Mineral and Jaya Swarasa 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 PAM Mineral and Jaya Swarasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAM Mineral Tbk and Jaya Swarasa Agung, you can compare the effects of market volatilities on PAM Mineral and Jaya Swarasa 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 PAM Mineral with a short position of Jaya Swarasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAM Mineral and Jaya Swarasa.
Diversification Opportunities for PAM Mineral and Jaya Swarasa
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between PAM and Jaya is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PAM Mineral Tbk and Jaya Swarasa Agung in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Swarasa Agung and PAM Mineral 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 PAM Mineral Tbk are associated (or correlated) with Jaya Swarasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Swarasa Agung has no effect on the direction of PAM Mineral i.e., PAM Mineral and Jaya Swarasa go up and down completely randomly.
Pair Corralation between PAM Mineral and Jaya Swarasa
Assuming the 90 days trading horizon PAM Mineral Tbk is expected to generate 1.64 times more return on investment than Jaya Swarasa. However, PAM Mineral is 1.64 times more volatile than Jaya Swarasa Agung. It trades about 0.13 of its potential returns per unit of risk. Jaya Swarasa Agung is currently generating about -0.49 per unit of risk. If you would invest 27,400 in PAM Mineral Tbk on August 31, 2024 and sell it today you would earn a total of 2,200 from holding PAM Mineral Tbk or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PAM Mineral Tbk vs. Jaya Swarasa Agung
Performance |
| Timeline |
| PAM Mineral Tbk |
| Jaya Swarasa Agung |
PAM Mineral and Jaya Swarasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAM Mineral and Jaya Swarasa
The main advantage of trading using opposite PAM Mineral and Jaya Swarasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAM Mineral position performs unexpectedly, Jaya Swarasa 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 Swarasa will offset losses from the drop in Jaya Swarasa's long position.| PAM Mineral vs. Merdeka Copper Gold | PAM Mineral vs. Aneka Tambang Persero | PAM Mineral vs. Bumi Resources Minerals | PAM Mineral vs. Timah Persero Tbk |
| Jaya Swarasa vs. Wahana Inti MakmurTbk | Jaya Swarasa vs. Formosa Ingredient Factory | Jaya Swarasa vs. Triputra Agro Persada | Jaya Swarasa vs. Cisarua Mountain Dairy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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