Correlation Between Mahkota Group and PT Jhonlin

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

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

Diversification Opportunities for Mahkota Group and PT Jhonlin

0.51

Correlation Coefficient

Mahkota Group  PT Jhonlin

Very weak diversification

The 3 months correlation between Mahkota and JARR is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mahkota Group Tbk and PT Jhonlin Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Jhonlin Agro and Mahkota Group 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 Mahkota Group Tbk are associated (or correlated) with PT Jhonlin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Jhonlin Agro has no effect on the direction of Mahkota Group i.e., Mahkota Group and PT Jhonlin go up and down completely randomly.

Pair Corralation between Mahkota Group and PT Jhonlin

Assuming the 90 days trading horizon Mahkota Group is expected to generate 11.28 times less return on investment than PT Jhonlin. But when comparing it to its historical volatility, Mahkota Group Tbk is 4.26 times less risky than PT Jhonlin. It trades about 0.03 of its potential returns per unit of risk. PT Jhonlin Agro is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  27,600  in PT Jhonlin Agro on September 13, 2024 and sell it today you would earn a total of  6,400  from holding PT Jhonlin Agro or generate 23.19% return on investment over 90 days.

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

Mahkota Group Tbk  vs.  PT Jhonlin Agro

Mahkota Group Tbk

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mahkota Group Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Mahkota Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PT Jhonlin Agro

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Jhonlin Agro are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Jhonlin disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mahkota Group and PT Jhonlin

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

The idea behind Mahkota Group Tbk and PT Jhonlin Agro 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 Global Correlations module to find global opportunities by holding instruments from different markets.