Correlation Between J Resources and Nusantara Almazia
Can any of the company-specific risk be diversified away by investing in both J Resources and Nusantara Almazia 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 J Resources and Nusantara Almazia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Resources Asia and Nusantara Almazia, you can compare the effects of market volatilities on J Resources and Nusantara Almazia 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 J Resources with a short position of Nusantara Almazia. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Resources and Nusantara Almazia.
Diversification Opportunities for J Resources and Nusantara Almazia
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PSAB and Nusantara is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding J Resources Asia and Nusantara Almazia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusantara Almazia and J Resources 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 J Resources Asia are associated (or correlated) with Nusantara Almazia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusantara Almazia has no effect on the direction of J Resources i.e., J Resources and Nusantara Almazia go up and down completely randomly.
Pair Corralation between J Resources and Nusantara Almazia
Assuming the 90 days trading horizon J Resources Asia is expected to generate 0.89 times more return on investment than Nusantara Almazia. However, J Resources Asia is 1.12 times less risky than Nusantara Almazia. It trades about 0.11 of its potential returns per unit of risk. Nusantara Almazia is currently generating about 0.03 per unit of risk. If you would invest 13,100 in J Resources Asia on August 28, 2024 and sell it today you would earn a total of 17,300 from holding J Resources Asia or generate 132.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Resources Asia vs. Nusantara Almazia
Performance |
| Timeline |
| J Resources Asia |
| Nusantara Almazia |
J Resources and Nusantara Almazia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Resources and Nusantara Almazia
The main advantage of trading using opposite J Resources and Nusantara Almazia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Resources position performs unexpectedly, Nusantara Almazia 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 Nusantara Almazia will offset losses from the drop in Nusantara Almazia's long position.| J Resources vs. Kedaung Indah Can | J Resources vs. Langgeng Makmur Industri | J Resources vs. Kabelindo Murni Tbk | J Resources vs. Mustika Ratu Tbk |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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