Correlation Between Pembangunan Jaya and Tempo Inti
Can any of the company-specific risk be diversified away by investing in both Pembangunan Jaya and Tempo Inti 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 Pembangunan Jaya and Tempo Inti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembangunan Jaya Ancol and Tempo Inti Media, you can compare the effects of market volatilities on Pembangunan Jaya and Tempo Inti 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 Pembangunan Jaya with a short position of Tempo Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembangunan Jaya and Tempo Inti.
Diversification Opportunities for Pembangunan Jaya and Tempo Inti
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pembangunan and Tempo is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Pembangunan Jaya Ancol and Tempo Inti Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempo Inti Media and Pembangunan Jaya 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 Pembangunan Jaya Ancol are associated (or correlated) with Tempo Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempo Inti Media has no effect on the direction of Pembangunan Jaya i.e., Pembangunan Jaya and Tempo Inti go up and down completely randomly.
Pair Corralation between Pembangunan Jaya and Tempo Inti
Assuming the 90 days trading horizon Pembangunan Jaya Ancol is expected to under-perform the Tempo Inti. But the stock apears to be less risky and, when comparing its historical volatility, Pembangunan Jaya Ancol is 2.73 times less risky than Tempo Inti. The stock trades about 0.0 of its potential returns per unit of risk. The Tempo Inti Media is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,000 in Tempo Inti Media on November 2, 2024 and sell it today you would earn a total of 3,300 from holding Tempo Inti Media or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembangunan Jaya Ancol vs. Tempo Inti Media
Performance |
| Timeline |
| Pembangunan Jaya Ancol |
| Tempo Inti Media |
Pembangunan Jaya and Tempo Inti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembangunan Jaya and Tempo Inti
The main advantage of trading using opposite Pembangunan Jaya and Tempo Inti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembangunan Jaya position performs unexpectedly, Tempo Inti 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 Tempo Inti will offset losses from the drop in Tempo Inti's long position.| Pembangunan Jaya vs. Lautan Luas Tbk | Pembangunan Jaya vs. Panorama Sentrawisata Tbk | Pembangunan Jaya vs. Multi Indocitra Tbk | Pembangunan Jaya vs. Hotel Sahid Jaya |
| Tempo Inti vs. Wicaksana Overseas International | Tempo Inti vs. Wahana Pronatural | Tempo Inti vs. Tigaraksa Satria Tbk | Tempo Inti vs. Millennium Pharmacon International |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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