Correlation Between J Resources and Prodia Widyahusada
Can any of the company-specific risk be diversified away by investing in both J Resources and Prodia Widyahusada 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 Prodia Widyahusada 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 Prodia Widyahusada Tbk, you can compare the effects of market volatilities on J Resources and Prodia Widyahusada 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 Prodia Widyahusada. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Resources and Prodia Widyahusada.
Diversification Opportunities for J Resources and Prodia Widyahusada
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PSAB and Prodia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding J Resources Asia and Prodia Widyahusada Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodia Widyahusada Tbk 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 Prodia Widyahusada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodia Widyahusada Tbk has no effect on the direction of J Resources i.e., J Resources and Prodia Widyahusada go up and down completely randomly.
Pair Corralation between J Resources and Prodia Widyahusada
Assuming the 90 days trading horizon J Resources Asia is expected to generate 2.44 times more return on investment than Prodia Widyahusada. However, J Resources is 2.44 times more volatile than Prodia Widyahusada Tbk. It trades about 0.13 of its potential returns per unit of risk. Prodia Widyahusada Tbk is currently generating about -0.04 per unit of risk. If you would invest 15,200 in J Resources Asia on September 1, 2024 and sell it today you would earn a total of 15,000 from holding J Resources Asia or generate 98.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
J Resources Asia vs. Prodia Widyahusada Tbk
Performance |
| Timeline |
| J Resources Asia |
| Prodia Widyahusada Tbk |
J Resources and Prodia Widyahusada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Resources and Prodia Widyahusada
The main advantage of trading using opposite J Resources and Prodia Widyahusada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Resources position performs unexpectedly, Prodia Widyahusada 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 Prodia Widyahusada will offset losses from the drop in Prodia Widyahusada'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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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