Correlation Between Jaya Swarasa and PAM Mineral
Can any of the company-specific risk be diversified away by investing in both Jaya Swarasa and PAM Mineral 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 Jaya Swarasa and PAM Mineral into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaya Swarasa Agung and PAM Mineral Tbk, you can compare the effects of market volatilities on Jaya Swarasa and PAM Mineral 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 Jaya Swarasa with a short position of PAM Mineral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaya Swarasa and PAM Mineral.
Diversification Opportunities for Jaya Swarasa and PAM Mineral
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jaya and PAM is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Swarasa Agung and PAM Mineral Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAM Mineral Tbk and Jaya Swarasa 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 Jaya Swarasa Agung are associated (or correlated) with PAM Mineral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAM Mineral Tbk has no effect on the direction of Jaya Swarasa i.e., Jaya Swarasa and PAM Mineral go up and down completely randomly.
Pair Corralation between Jaya Swarasa and PAM Mineral
Assuming the 90 days trading horizon Jaya Swarasa Agung is expected to under-perform the PAM Mineral. But the stock apears to be less risky and, when comparing its historical volatility, Jaya Swarasa Agung is 1.64 times less risky than PAM Mineral. The stock trades about -0.49 of its potential returns per unit of risk. The PAM Mineral Tbk is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 27,400 in PAM Mineral Tbk on August 31, 2024 and sell it today you would earn a total of 2,200 from holding PAM Mineral Tbk or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jaya Swarasa Agung vs. PAM Mineral Tbk
Performance |
| Timeline |
| Jaya Swarasa Agung |
| PAM Mineral Tbk |
Jaya Swarasa and PAM Mineral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaya Swarasa and PAM Mineral
The main advantage of trading using opposite Jaya Swarasa and PAM Mineral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaya Swarasa position performs unexpectedly, PAM Mineral 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 PAM Mineral will offset losses from the drop in PAM Mineral's long position.| Jaya Swarasa vs. Wahana Inti MakmurTbk | Jaya Swarasa vs. Formosa Ingredient Factory | Jaya Swarasa vs. Triputra Agro Persada | Jaya Swarasa vs. Cisarua Mountain Dairy |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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