Correlation Between J Resources and Destinasi Tirta
Can any of the company-specific risk be diversified away by investing in both J Resources and Destinasi Tirta 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 Destinasi Tirta 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 Destinasi Tirta Nusantara, you can compare the effects of market volatilities on J Resources and Destinasi Tirta 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 Destinasi Tirta. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Resources and Destinasi Tirta.
Diversification Opportunities for J Resources and Destinasi Tirta
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PSAB and Destinasi is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding J Resources Asia and Destinasi Tirta Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destinasi Tirta Nusantara 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 Destinasi Tirta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destinasi Tirta Nusantara has no effect on the direction of J Resources i.e., J Resources and Destinasi Tirta go up and down completely randomly.
Pair Corralation between J Resources and Destinasi Tirta
Assuming the 90 days trading horizon J Resources Asia is expected to under-perform the Destinasi Tirta. In addition to that, J Resources is 4.6 times more volatile than Destinasi Tirta Nusantara. It trades about -0.09 of its total potential returns per unit of risk. Destinasi Tirta Nusantara is currently generating about 0.06 per unit of volatility. If you would invest 26,800 in Destinasi Tirta Nusantara on September 1, 2024 and sell it today you would earn a total of 200.00 from holding Destinasi Tirta Nusantara or generate 0.75% 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. Destinasi Tirta Nusantara
Performance |
| Timeline |
| J Resources Asia |
| Destinasi Tirta Nusantara |
J Resources and Destinasi Tirta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Resources and Destinasi Tirta
The main advantage of trading using opposite J Resources and Destinasi Tirta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Resources position performs unexpectedly, Destinasi Tirta 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 Destinasi Tirta will offset losses from the drop in Destinasi Tirta's long position.| J Resources vs. Merdeka Copper Gold | J Resources vs. Golden Eagle Energy | J Resources vs. Rukun Raharja Tbk | J Resources vs. Wilton Makmur Indonesia |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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