Correlation Between Sona Topas and Pembangunan Jaya
Can any of the company-specific risk be diversified away by investing in both Sona Topas and Pembangunan Jaya 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 Sona Topas and Pembangunan Jaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sona Topas Tourism and Pembangunan Jaya Ancol, you can compare the effects of market volatilities on Sona Topas and Pembangunan Jaya 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 Sona Topas with a short position of Pembangunan Jaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sona Topas and Pembangunan Jaya.
Diversification Opportunities for Sona Topas and Pembangunan Jaya
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sona and Pembangunan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sona Topas Tourism and Pembangunan Jaya Ancol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembangunan Jaya Ancol and Sona Topas 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 Sona Topas Tourism are associated (or correlated) with Pembangunan Jaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembangunan Jaya Ancol has no effect on the direction of Sona Topas i.e., Sona Topas and Pembangunan Jaya go up and down completely randomly.
Pair Corralation between Sona Topas and Pembangunan Jaya
Assuming the 90 days trading horizon Sona Topas Tourism is expected to generate 16.93 times more return on investment than Pembangunan Jaya. However, Sona Topas is 16.93 times more volatile than Pembangunan Jaya Ancol. It trades about 0.05 of its potential returns per unit of risk. Pembangunan Jaya Ancol is currently generating about 0.0 per unit of risk. If you would invest 182,500 in Sona Topas Tourism on November 2, 2024 and sell it today you would earn a total of 132,500 from holding Sona Topas Tourism or generate 72.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sona Topas Tourism vs. Pembangunan Jaya Ancol
Performance |
| Timeline |
| Sona Topas Tourism |
| Pembangunan Jaya Ancol |
Sona Topas and Pembangunan Jaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sona Topas and Pembangunan Jaya
The main advantage of trading using opposite Sona Topas and Pembangunan Jaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sona Topas position performs unexpectedly, Pembangunan Jaya 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 Pembangunan Jaya will offset losses from the drop in Pembangunan Jaya's long position.| Sona Topas vs. Lippo General Insurance | Sona Topas vs. Equity Development Investment | Sona Topas vs. Indointernet Tbk PT | Sona Topas vs. Ciptadana Asset Management |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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