Correlation Between Jaya Sukses and Natura City
Can any of the company-specific risk be diversified away by investing in both Jaya Sukses and Natura City 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 Jaya Sukses and Natura City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaya Sukses Makmur and Natura City Developments, you can compare the effects of market volatilities on Jaya Sukses and Natura City 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 Jaya Sukses with a short position of Natura City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaya Sukses and Natura City.
Diversification Opportunities for Jaya Sukses and Natura City
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jaya and Natura is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Sukses Makmur and Natura City Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natura City Developments and Jaya Sukses 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 Jaya Sukses Makmur are associated (or correlated) with Natura City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natura City Developments has no effect on the direction of Jaya Sukses i.e., Jaya Sukses and Natura City go up and down completely randomly.
Pair Corralation between Jaya Sukses and Natura City
Assuming the 90 days trading horizon Jaya Sukses is expected to generate 20.9 times less return on investment than Natura City. But when comparing it to its historical volatility, Jaya Sukses Makmur is 30.18 times less risky than Natura City. It trades about 0.19 of its potential returns per unit of risk. Natura City Developments is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Natura City Developments on August 30, 2024 and sell it today you would earn a total of 7,100 from holding Natura City Developments or generate 142.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jaya Sukses Makmur vs. Natura City Developments
Performance |
| Timeline |
| Jaya Sukses Makmur |
| Natura City Developments |
Jaya Sukses and Natura City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaya Sukses and Natura City
The main advantage of trading using opposite Jaya Sukses and Natura City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaya Sukses position performs unexpectedly, Natura City 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 Natura City will offset losses from the drop in Natura City's long position.| Jaya Sukses vs. Pollux Properti Indonesia | Jaya Sukses vs. MNC Studios International | Jaya Sukses vs. MAP Aktif Adiperkasa | Jaya Sukses vs. Trimitra Propertindo Tbk |
| Natura City vs. Bakrie Brothers Tbk | Natura City vs. Bakrie Sumatera Plantations | Natura City vs. Energi Mega Persada | Natura City vs. Darma Henwa Tbk |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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