Correlation Between Urban Jakarta and Sawit Sumbermas
Can any of the company-specific risk be diversified away by investing in both Urban Jakarta and Sawit Sumbermas 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 Urban Jakarta and Sawit Sumbermas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Jakarta Propertindo and Sawit Sumbermas Sarana, you can compare the effects of market volatilities on Urban Jakarta and Sawit Sumbermas 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 Urban Jakarta with a short position of Sawit Sumbermas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Jakarta and Sawit Sumbermas.
Diversification Opportunities for Urban Jakarta and Sawit Sumbermas
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Urban and Sawit is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Urban Jakarta Propertindo and Sawit Sumbermas Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sawit Sumbermas Sarana and Urban Jakarta 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 Urban Jakarta Propertindo are associated (or correlated) with Sawit Sumbermas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sawit Sumbermas Sarana has no effect on the direction of Urban Jakarta i.e., Urban Jakarta and Sawit Sumbermas go up and down completely randomly.
Pair Corralation between Urban Jakarta and Sawit Sumbermas
Assuming the 90 days trading horizon Urban Jakarta Propertindo is expected to generate 1.12 times more return on investment than Sawit Sumbermas. However, Urban Jakarta is 1.12 times more volatile than Sawit Sumbermas Sarana. It trades about 0.02 of its potential returns per unit of risk. Sawit Sumbermas Sarana is currently generating about 0.02 per unit of risk. If you would invest 11,200 in Urban Jakarta Propertindo on December 2, 2024 and sell it today you would earn a total of 0.00 from holding Urban Jakarta Propertindo or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Urban Jakarta Propertindo vs. Sawit Sumbermas Sarana
Performance |
| Timeline |
| Urban Jakarta Propertindo |
| Sawit Sumbermas Sarana |
Urban Jakarta and Sawit Sumbermas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Jakarta and Sawit Sumbermas
The main advantage of trading using opposite Urban Jakarta and Sawit Sumbermas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Jakarta position performs unexpectedly, Sawit Sumbermas 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 Sawit Sumbermas will offset losses from the drop in Sawit Sumbermas' long position.| Urban Jakarta vs. Pollux Properti Indonesia | ||
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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