Correlation Between Tempo Inti and Pembangunan Jaya
Can any of the company-specific risk be diversified away by investing in both Tempo Inti 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 Tempo Inti and Pembangunan Jaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tempo Inti Media and Pembangunan Jaya Ancol, you can compare the effects of market volatilities on Tempo Inti 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 Tempo Inti with a short position of Pembangunan Jaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tempo Inti and Pembangunan Jaya.
Diversification Opportunities for Tempo Inti and Pembangunan Jaya
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tempo and Pembangunan is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tempo Inti Media 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 Tempo Inti 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 Tempo Inti Media 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 Tempo Inti i.e., Tempo Inti and Pembangunan Jaya go up and down completely randomly.
Pair Corralation between Tempo Inti and Pembangunan Jaya
Assuming the 90 days trading horizon Tempo Inti Media is expected to generate 2.73 times more return on investment than Pembangunan Jaya. However, Tempo Inti is 2.73 times more volatile than Pembangunan Jaya Ancol. It trades about 0.03 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 11,000 in Tempo Inti Media on November 2, 2024 and sell it today you would earn a total of 3,300 from holding Tempo Inti Media or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tempo Inti Media vs. Pembangunan Jaya Ancol
Performance |
| Timeline |
| Tempo Inti Media |
| Pembangunan Jaya Ancol |
Tempo Inti and Pembangunan Jaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tempo Inti and Pembangunan Jaya
The main advantage of trading using opposite Tempo Inti and Pembangunan Jaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tempo Inti 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.| Tempo Inti vs. Wicaksana Overseas International | Tempo Inti vs. Wahana Pronatural | Tempo Inti vs. Tigaraksa Satria Tbk | Tempo Inti vs. Millennium Pharmacon International |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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