Correlation Between Snap and PT Jhonlin
Can any of the company-specific risk be diversified away by investing in both Snap and PT Jhonlin 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 Snap and PT Jhonlin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and PT Jhonlin Agro, you can compare the effects of market volatilities on Snap and PT Jhonlin 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 Snap with a short position of PT Jhonlin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and PT Jhonlin.
Diversification Opportunities for Snap and PT Jhonlin
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and JARR is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and PT Jhonlin Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Jhonlin Agro and Snap 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 Snap Inc are associated (or correlated) with PT Jhonlin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Jhonlin Agro has no effect on the direction of Snap i.e., Snap and PT Jhonlin go up and down completely randomly.
Pair Corralation between Snap and PT Jhonlin
Given the investment horizon of 90 days Snap is expected to generate 1.57 times less return on investment than PT Jhonlin. But when comparing it to its historical volatility, Snap Inc is 1.39 times less risky than PT Jhonlin. It trades about 0.03 of its potential returns per unit of risk. PT Jhonlin Agro is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 28,200 in PT Jhonlin Agro on August 27, 2024 and sell it today you would earn a total of 0.00 from holding PT Jhonlin Agro or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.62% |
| Values | Daily Returns |
Snap Inc vs. PT Jhonlin Agro
Performance |
| Timeline |
| Snap Inc |
| PT Jhonlin Agro |
Snap and PT Jhonlin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and PT Jhonlin
The main advantage of trading using opposite Snap and PT Jhonlin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, PT Jhonlin 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 PT Jhonlin will offset losses from the drop in PT Jhonlin's long position.The idea behind Snap Inc and PT Jhonlin Agro pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PT Jhonlin vs. Dharma Satya Nusantara | PT Jhonlin vs. Saratoga Investama Sedaya | PT Jhonlin vs. Surya Esa Perkasa | PT Jhonlin vs. Elang Mahkota Teknologi |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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