Correlation Between Jakarta Int and Menteng Heritage
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Menteng Heritage 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 Jakarta Int and Menteng Heritage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jakarta Int Hotels and Menteng Heritage Realty, you can compare the effects of market volatilities on Jakarta Int and Menteng Heritage 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 Jakarta Int with a short position of Menteng Heritage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Menteng Heritage.
Diversification Opportunities for Jakarta Int and Menteng Heritage
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jakarta and Menteng is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Menteng Heritage Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menteng Heritage Realty and Jakarta Int 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 Jakarta Int Hotels are associated (or correlated) with Menteng Heritage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menteng Heritage Realty has no effect on the direction of Jakarta Int i.e., Jakarta Int and Menteng Heritage go up and down completely randomly.
Pair Corralation between Jakarta Int and Menteng Heritage
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 0.39 times more return on investment than Menteng Heritage. However, Jakarta Int Hotels is 2.56 times less risky than Menteng Heritage. It trades about -0.05 of its potential returns per unit of risk. Menteng Heritage Realty is currently generating about -0.35 per unit of risk. If you would invest 38,400 in Jakarta Int Hotels on February 24, 2024 and sell it today you would lose (2,000) from holding Jakarta Int Hotels or give up 5.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Jakarta Int Hotels vs. Menteng Heritage Realty
Performance |
Timeline |
Jakarta Int Hotels |
Menteng Heritage Realty |
Jakarta Int and Menteng Heritage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jakarta Int and Menteng Heritage
The main advantage of trading using opposite Jakarta Int and Menteng Heritage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Menteng Heritage 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 Menteng Heritage will offset losses from the drop in Menteng Heritage's long position.Jakarta Int vs. Millennium Pharmacon International | Jakarta Int vs. Tempo Inti Media | Jakarta Int vs. PT MNC Energy | Jakarta Int vs. J Resources Asia |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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