Correlation Between Semen Indonesia and Japfa Comfeed
Can any of the company-specific risk be diversified away by investing in both Semen Indonesia and Japfa Comfeed 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 Semen Indonesia and Japfa Comfeed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semen Indonesia Persero and Japfa Comfeed Indonesia, you can compare the effects of market volatilities on Semen Indonesia and Japfa Comfeed 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 Semen Indonesia with a short position of Japfa Comfeed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semen Indonesia and Japfa Comfeed.
Diversification Opportunities for Semen Indonesia and Japfa Comfeed
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Semen and Japfa is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Semen Indonesia Persero and Japfa Comfeed Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japfa Comfeed Indonesia and Semen Indonesia 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 Semen Indonesia Persero are associated (or correlated) with Japfa Comfeed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japfa Comfeed Indonesia has no effect on the direction of Semen Indonesia i.e., Semen Indonesia and Japfa Comfeed go up and down completely randomly.
Pair Corralation between Semen Indonesia and Japfa Comfeed
Assuming the 90 days trading horizon Semen Indonesia Persero is expected to under-perform the Japfa Comfeed. But the stock apears to be less risky and, when comparing its historical volatility, Semen Indonesia Persero is 1.28 times less risky than Japfa Comfeed. The stock trades about -0.25 of its potential returns per unit of risk. The Japfa Comfeed Indonesia is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 166,500 in Japfa Comfeed Indonesia on August 28, 2024 and sell it today you would earn a total of 12,000 from holding Japfa Comfeed Indonesia or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semen Indonesia Persero vs. Japfa Comfeed Indonesia
Performance |
| Timeline |
| Semen Indonesia Persero |
| Japfa Comfeed Indonesia |
Semen Indonesia and Japfa Comfeed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semen Indonesia and Japfa Comfeed
The main advantage of trading using opposite Semen Indonesia and Japfa Comfeed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semen Indonesia position performs unexpectedly, Japfa Comfeed 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 Japfa Comfeed will offset losses from the drop in Japfa Comfeed's long position.| Semen Indonesia vs. Indocement Tunggal Prakarsa | Semen Indonesia vs. United Tractors Tbk | Semen Indonesia vs. Jasa Marga Tbk | Semen Indonesia vs. PT Indofood Sukses |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |