Correlation Between Chandra Asri and Jakarta Int

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Jakarta Int 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 Chandra Asri and Jakarta Int into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chandra Asri Petrochemical and Jakarta Int Hotels, you can compare the effects of market volatilities on Chandra Asri and Jakarta Int 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 Chandra Asri with a short position of Jakarta Int. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Jakarta Int.

Diversification Opportunities for Chandra Asri and Jakarta Int

-0.7
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Chandra and Jakarta is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Jakarta Int Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jakarta Int Hotels and Chandra Asri 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 Chandra Asri Petrochemical are associated (or correlated) with Jakarta Int. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jakarta Int Hotels has no effect on the direction of Chandra Asri i.e., Chandra Asri and Jakarta Int go up and down completely randomly.

Pair Corralation between Chandra Asri and Jakarta Int

Assuming the 90 days trading horizon Chandra Asri is expected to generate 1.19 times less return on investment than Jakarta Int. But when comparing it to its historical volatility, Chandra Asri Petrochemical is 1.15 times less risky than Jakarta Int. It trades about 0.11 of its potential returns per unit of risk. Jakarta Int Hotels is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  39,000  in Jakarta Int Hotels on September 12, 2024 and sell it today you would earn a total of  147,000  from holding Jakarta Int Hotels or generate 376.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.72%
ValuesDaily Returns

Chandra Asri Petrochemical  vs.  Jakarta Int Hotels

 Performance 
       Timeline  
Chandra Asri Petroch 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Chandra Asri Petrochemical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
Jakarta Int Hotels 

Risk-Adjusted Performance

25 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Jakarta Int Hotels are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Jakarta Int disclosed solid returns over the last few months and may actually be approaching a breakup point.

Chandra Asri and Jakarta Int Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chandra Asri and Jakarta Int

The main advantage of trading using opposite Chandra Asri and Jakarta Int positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Jakarta Int 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 Jakarta Int will offset losses from the drop in Jakarta Int's long position.
The idea behind Chandra Asri Petrochemical and Jakarta Int Hotels 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.
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.