Correlation Between PP Presisi and Jaya Konstruksi
Can any of the company-specific risk be diversified away by investing in both PP Presisi and Jaya Konstruksi 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 PP Presisi and Jaya Konstruksi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PP Presisi Tbk and Jaya Konstruksi Manggala, you can compare the effects of market volatilities on PP Presisi and Jaya Konstruksi 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 PP Presisi with a short position of Jaya Konstruksi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PP Presisi and Jaya Konstruksi.
Diversification Opportunities for PP Presisi and Jaya Konstruksi
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PPRE and Jaya is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding PP Presisi Tbk and Jaya Konstruksi Manggala in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Konstruksi Manggala and PP Presisi 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 PP Presisi Tbk are associated (or correlated) with Jaya Konstruksi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Konstruksi Manggala has no effect on the direction of PP Presisi i.e., PP Presisi and Jaya Konstruksi go up and down completely randomly.
Pair Corralation between PP Presisi and Jaya Konstruksi
Assuming the 90 days trading horizon PP Presisi Tbk is expected to under-perform the Jaya Konstruksi. In addition to that, PP Presisi is 1.59 times more volatile than Jaya Konstruksi Manggala. It trades about -0.01 of its total potential returns per unit of risk. Jaya Konstruksi Manggala is currently generating about 0.02 per unit of volatility. If you would invest 8,175 in Jaya Konstruksi Manggala on September 4, 2024 and sell it today you would earn a total of 325.00 from holding Jaya Konstruksi Manggala or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PP Presisi Tbk vs. Jaya Konstruksi Manggala
Performance |
| Timeline |
| PP Presisi Tbk |
| Jaya Konstruksi Manggala |
PP Presisi and Jaya Konstruksi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PP Presisi and Jaya Konstruksi
The main advantage of trading using opposite PP Presisi and Jaya Konstruksi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PP Presisi position performs unexpectedly, Jaya Konstruksi 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 Konstruksi will offset losses from the drop in Jaya Konstruksi's long position.| PP Presisi vs. Wijaya Karya Bangunan | PP Presisi vs. PP Properti Tbk | PP Presisi vs. Wijaya Karya Beton | PP Presisi vs. Soechi Lines Tbk |
| Jaya Konstruksi vs. Jaya Real Property | Jaya Konstruksi vs. Perdana Gapura Prima | Jaya Konstruksi vs. Jakarta Int Hotels | Jaya Konstruksi 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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