Correlation Between PT Bukalapak and Jasnita Telekomindo

Can any of the company-specific risk be diversified away by investing in both PT Bukalapak and Jasnita Telekomindo 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 PT Bukalapak and Jasnita Telekomindo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Bukalapak and Jasnita Telekomindo Tbk, you can compare the effects of market volatilities on PT Bukalapak and Jasnita Telekomindo 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 PT Bukalapak with a short position of Jasnita Telekomindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bukalapak and Jasnita Telekomindo.

Diversification Opportunities for PT Bukalapak and Jasnita Telekomindo

-0.4

Correlation Coefficient

PT Bukalapak  Jasnita Telekomindo

Very good diversification

The 3 months correlation between BUKA and Jasnita is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PT Bukalapak and Jasnita Telekomindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasnita Telekomindo Tbk and PT Bukalapak 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 PT Bukalapak are associated (or correlated) with Jasnita Telekomindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasnita Telekomindo Tbk has no effect on the direction of PT Bukalapak i.e., PT Bukalapak and Jasnita Telekomindo go up and down completely randomly.

Pair Corralation between PT Bukalapak and Jasnita Telekomindo

Assuming the 90 days trading horizon PT Bukalapak is expected to generate 2.13 times more return on investment than Jasnita Telekomindo. However, PT Bukalapak is 2.13 times more volatile than Jasnita Telekomindo Tbk. It trades about 0.03 of its potential returns per unit of risk. Jasnita Telekomindo Tbk is currently generating about 0.04 per unit of risk. If you would invest  11,800  in PT Bukalapak on September 3, 2024 and sell it today you would earn a total of  400.00  from holding PT Bukalapak or generate 3.39% return on investment over 90 days.

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

PT Bukalapak  vs.  Jasnita Telekomindo Tbk

PT Bukalapak

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bukalapak are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Bukalapak may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jasnita Telekomindo Tbk

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jasnita Telekomindo Tbk are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Jasnita Telekomindo 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 PT Bukalapak and Jasnita Telekomindo

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

The idea behind PT Bukalapak and Jasnita Telekomindo Tbk 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.