Correlation Between Rukun Raharja and J Resources
Can any of the company-specific risk be diversified away by investing in both Rukun Raharja and J Resources 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 Rukun Raharja and J Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rukun Raharja Tbk and J Resources Asia, you can compare the effects of market volatilities on Rukun Raharja and J Resources 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 Rukun Raharja with a short position of J Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rukun Raharja and J Resources.
Diversification Opportunities for Rukun Raharja and J Resources
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rukun and PSAB is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Rukun Raharja Tbk and J Resources Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Resources Asia and Rukun Raharja 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 Rukun Raharja Tbk are associated (or correlated) with J Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Resources Asia has no effect on the direction of Rukun Raharja i.e., Rukun Raharja and J Resources go up and down completely randomly.
Pair Corralation between Rukun Raharja and J Resources
Assuming the 90 days trading horizon Rukun Raharja Tbk is expected to generate 2.14 times more return on investment than J Resources. However, Rukun Raharja is 2.14 times more volatile than J Resources Asia. It trades about 0.24 of its potential returns per unit of risk. J Resources Asia is currently generating about 0.1 per unit of risk. If you would invest 175,000 in Rukun Raharja Tbk on August 26, 2024 and sell it today you would earn a total of 61,000 from holding Rukun Raharja Tbk or generate 34.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rukun Raharja Tbk vs. J Resources Asia
Performance |
| Timeline |
| Rukun Raharja Tbk |
| J Resources Asia |
Rukun Raharja and J Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rukun Raharja and J Resources
The main advantage of trading using opposite Rukun Raharja and J Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rukun Raharja position performs unexpectedly, J Resources 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 J Resources will offset losses from the drop in J Resources' long position.| Rukun Raharja vs. Petrosea Tbk | Rukun Raharja vs. Harum Energy Tbk | Rukun Raharja vs. Perdana Karya Perkasa | Rukun Raharja vs. Samindo Resources Tbk |
| J Resources vs. Merdeka Copper Gold | J Resources vs. Golden Eagle Energy | J Resources vs. Rukun Raharja Tbk | J Resources vs. Wilton Makmur Indonesia |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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