Correlation Between Autopedia Sukses and Urban Jakarta

Can any of the company-specific risk be diversified away by investing in both Autopedia Sukses and Urban Jakarta 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 Autopedia Sukses and Urban Jakarta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Autopedia Sukses Lestari and Urban Jakarta Propertindo, you can compare the effects of market volatilities on Autopedia Sukses and Urban Jakarta 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 Autopedia Sukses with a short position of Urban Jakarta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autopedia Sukses and Urban Jakarta.

Diversification Opportunities for Autopedia Sukses and Urban Jakarta

0.59

Correlation Coefficient

Autopedia Sukses  Urban Jakarta

Very weak diversification

The 3 months correlation between Autopedia and Urban is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Autopedia Sukses Lestari and Urban Jakarta Propertindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Jakarta Propertindo and Autopedia Sukses 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 Autopedia Sukses Lestari are associated (or correlated) with Urban Jakarta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Jakarta Propertindo has no effect on the direction of Autopedia Sukses i.e., Autopedia Sukses and Urban Jakarta go up and down completely randomly.

Pair Corralation between Autopedia Sukses and Urban Jakarta

Assuming the 90 days trading horizon Autopedia Sukses Lestari is expected to under-perform the Urban Jakarta. But the stock apears to be less risky and, when comparing its historical volatility, Autopedia Sukses Lestari is 2.46 times less risky than Urban Jakarta. The stock trades about -0.24 of its potential returns per unit of risk. The Urban Jakarta Propertindo is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  14,800  in Urban Jakarta Propertindo on September 15, 2024 and sell it today you would lose (1,500) from holding Urban Jakarta Propertindo or give up 10.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Autopedia Sukses Lestari  vs.  Urban Jakarta Propertindo

Autopedia Sukses Lestari

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autopedia Sukses Lestari has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Urban Jakarta Propertindo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Urban Jakarta Propertindo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Urban Jakarta is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Autopedia Sukses and Urban Jakarta

The main advantage of trading using opposite Autopedia Sukses and Urban Jakarta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autopedia Sukses position performs unexpectedly, Urban Jakarta 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 Urban Jakarta will offset losses from the drop in Urban Jakarta's long position.

The idea behind Autopedia Sukses Lestari and Urban Jakarta Propertindo 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.