Correlation Between Jakarta Int and Suryamas Dutamakmur

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

Diversification Opportunities for Jakarta Int and Suryamas Dutamakmur

0.72

Correlation Coefficient

Jakarta Int  Suryamas Dutamakmur

Poor diversification

The 3 months correlation between Jakarta and Suryamas is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Suryamas Dutamakmur Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suryamas Dutamakmur Tbk 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 Suryamas Dutamakmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suryamas Dutamakmur Tbk has no effect on the direction of Jakarta Int i.e., Jakarta Int and Suryamas Dutamakmur go up and down completely randomly.

Pair Corralation between Jakarta Int and Suryamas Dutamakmur

Assuming the 90 days trading horizon Jakarta Int Hotels is expected to under-perform the Suryamas Dutamakmur. In addition to that, Jakarta Int is 23.59 times more volatile than Suryamas Dutamakmur Tbk. It trades about -0.02 of its total potential returns per unit of risk. Suryamas Dutamakmur Tbk is currently generating about 0.08 per unit of volatility. If you would invest  52,000  in Suryamas Dutamakmur Tbk on September 26, 2024 and sell it today you would earn a total of  500.00  from holding Suryamas Dutamakmur Tbk or generate 0.96% return on investment over 90 days.

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

Jakarta Int Hotels  vs.  Suryamas Dutamakmur Tbk

Jakarta Int Hotels

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jakarta Int Hotels are ranked lower than 19 (%) 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.

Suryamas Dutamakmur Tbk

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Suryamas Dutamakmur Tbk are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Suryamas Dutamakmur may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jakarta Int and Suryamas Dutamakmur

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

The idea behind Jakarta Int Hotels and Suryamas Dutamakmur 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 Transaction History module to view history of all your transactions and understand their impact on performance.