Correlation Between Satria Mega and Jasa Armada
Can any of the company-specific risk be diversified away by investing in both Satria Mega and Jasa Armada 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 Satria Mega and Jasa Armada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satria Mega Kencana and Jasa Armada Indonesia, you can compare the effects of market volatilities on Satria Mega and Jasa Armada 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 Satria Mega with a short position of Jasa Armada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satria Mega and Jasa Armada.
Diversification Opportunities for Satria Mega and Jasa Armada
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Satria and Jasa is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Satria Mega Kencana and Jasa Armada Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasa Armada Indonesia and Satria Mega 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 Satria Mega Kencana are associated (or correlated) with Jasa Armada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasa Armada Indonesia has no effect on the direction of Satria Mega i.e., Satria Mega and Jasa Armada go up and down completely randomly.
Pair Corralation between Satria Mega and Jasa Armada
Assuming the 90 days trading horizon Satria Mega Kencana is expected to generate 11.52 times more return on investment than Jasa Armada. However, Satria Mega is 11.52 times more volatile than Jasa Armada Indonesia. It trades about 0.09 of its potential returns per unit of risk. Jasa Armada Indonesia is currently generating about 0.02 per unit of risk. If you would invest 23,000 in Satria Mega Kencana on August 27, 2024 and sell it today you would earn a total of 10,800 from holding Satria Mega Kencana or generate 46.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Satria Mega Kencana vs. Jasa Armada Indonesia
Performance |
| Timeline |
| Satria Mega Kencana |
| Jasa Armada Indonesia |
Satria Mega and Jasa Armada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Satria Mega and Jasa Armada
The main advantage of trading using opposite Satria Mega and Jasa Armada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satria Mega position performs unexpectedly, Jasa Armada 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 Jasa Armada will offset losses from the drop in Jasa Armada's long position.| Satria Mega vs. Jasa Armada Indonesia | Satria Mega vs. Cahayaputra Asa Keramik | Satria Mega vs. Campina Ice Cream |
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 CEOs Directory module to screen CEOs from public companies around the world.
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