Correlation Between Jakarta Int and Graha Layar

Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Graha Layar 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 Graha Layar 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 Graha Layar Prima, you can compare the effects of market volatilities on Jakarta Int and Graha Layar 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 Graha Layar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Graha Layar.

Diversification Opportunities for Jakarta Int and Graha Layar

0.09

Correlation Coefficient

Jakarta Int  Graha Layar

Significant diversification

The 3 months correlation between Jakarta and Graha is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Graha Layar Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graha Layar Prima 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 Graha Layar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graha Layar Prima has no effect on the direction of Jakarta Int i.e., Jakarta Int and Graha Layar go up and down completely randomly.

Pair Corralation between Jakarta Int and Graha Layar

If you would invest  95,000  in Jakarta Int Hotels on September 5, 2024 and sell it today you would earn a total of  106,000  from holding Jakarta Int Hotels or generate 111.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Jakarta Int Hotels  vs.  Graha Layar Prima

Jakarta Int Hotels

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Jakarta Int Hotels are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Jakarta Int disclosed solid returns over the last few months and may actually be approaching a breakup point.

Graha Layar Prima

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Graha Layar Prima are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Graha Layar may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jakarta Int and Graha Layar

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

The idea behind Jakarta Int Hotels and Graha Layar Prima 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.