Correlation Between Singaraja Putra and J Resources
Can any of the company-specific risk be diversified away by investing in both Singaraja Putra 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 Singaraja Putra and J Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singaraja Putra and J Resources Asia, you can compare the effects of market volatilities on Singaraja Putra 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 Singaraja Putra with a short position of J Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singaraja Putra and J Resources.
Diversification Opportunities for Singaraja Putra and J Resources
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Singaraja and PSAB is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Singaraja Putra 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 Singaraja Putra 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 Singaraja Putra 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 Singaraja Putra i.e., Singaraja Putra and J Resources go up and down completely randomly.
Pair Corralation between Singaraja Putra and J Resources
Assuming the 90 days trading horizon Singaraja Putra is expected to generate 2.54 times more return on investment than J Resources. However, Singaraja Putra is 2.54 times more volatile than J Resources Asia. It trades about -0.02 of its potential returns per unit of risk. J Resources Asia is currently generating about -0.16 per unit of risk. If you would invest 520,000 in Singaraja Putra on August 31, 2024 and sell it today you would lose (45,000) from holding Singaraja Putra or give up 8.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Singaraja Putra vs. J Resources Asia
Performance |
| Timeline |
| Singaraja Putra |
| J Resources Asia |
Singaraja Putra and J Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singaraja Putra and J Resources
The main advantage of trading using opposite Singaraja Putra and J Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singaraja Putra 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.| Singaraja Putra vs. Indonesia Fibreboard Industry | Singaraja Putra vs. Slj Global Tbk | Singaraja Putra vs. Darmi Bersaudara Tbk | Singaraja Putra vs. Integra Indocabinet 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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