Correlation Between Communication Cable and Jasnita Telekomindo

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

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

Diversification Opportunities for Communication Cable and Jasnita Telekomindo

0.25

Correlation Coefficient

Communication Cable  Jasnita Telekomindo

Modest diversification

The 3 months correlation between Communication and Jasnita is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Communication Cable Systems 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 Communication Cable 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 Communication Cable Systems 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 Communication Cable i.e., Communication Cable and Jasnita Telekomindo go up and down completely randomly.

Pair Corralation between Communication Cable and Jasnita Telekomindo

Assuming the 90 days trading horizon Communication Cable is expected to generate 7.74 times less return on investment than Jasnita Telekomindo. In addition to that, Communication Cable is 1.15 times more volatile than Jasnita Telekomindo Tbk. It trades about 0.01 of its total potential returns per unit of risk. Jasnita Telekomindo Tbk is currently generating about 0.12 per unit of volatility. If you would invest  5,600  in Jasnita Telekomindo Tbk on September 28, 2024 and sell it today you would earn a total of  2,000  from holding Jasnita Telekomindo Tbk or generate 35.71% return on investment over 90 days.

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

Communication Cable Systems  vs.  Jasnita Telekomindo Tbk

Communication Cable

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Communication Cable Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Communication Cable is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Jasnita Telekomindo Tbk

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jasnita Telekomindo Tbk are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Jasnita Telekomindo disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Communication Cable and Jasnita Telekomindo

The main advantage of trading using opposite Communication Cable and Jasnita Telekomindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication Cable 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 Communication Cable Systems 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.