Correlation Between J Resources and Dana Brata
Can any of the company-specific risk be diversified away by investing in both J Resources and Dana Brata 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 Dana Brata 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 Dana Brata Luhur, you can compare the effects of market volatilities on J Resources and Dana Brata 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 Dana Brata. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Resources and Dana Brata.
Diversification Opportunities for J Resources and Dana Brata
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PSAB and Dana is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding J Resources Asia and Dana Brata Luhur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Brata Luhur 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 Dana Brata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Brata Luhur has no effect on the direction of J Resources i.e., J Resources and Dana Brata go up and down completely randomly.
Pair Corralation between J Resources and Dana Brata
Assuming the 90 days trading horizon J Resources Asia is expected to under-perform the Dana Brata. In addition to that, J Resources is 3.09 times more volatile than Dana Brata Luhur. It trades about -0.08 of its total potential returns per unit of risk. Dana Brata Luhur is currently generating about 0.13 per unit of volatility. If you would invest 61,576 in Dana Brata Luhur on August 28, 2024 and sell it today you would earn a total of 1,924 from holding Dana Brata Luhur or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Resources Asia vs. Dana Brata Luhur
Performance |
| Timeline |
| J Resources Asia |
| Dana Brata Luhur |
J Resources and Dana Brata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Resources and Dana Brata
The main advantage of trading using opposite J Resources and Dana Brata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Resources position performs unexpectedly, Dana Brata 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 Dana Brata will offset losses from the drop in Dana Brata'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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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