Correlation Between Jaya Sukses and Catur Sentosa

Can any of the company-specific risk be diversified away by investing in both Jaya Sukses and Catur Sentosa 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 Jaya Sukses and Catur Sentosa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jaya Sukses Makmur and Catur Sentosa Adiprana, you can compare the effects of market volatilities on Jaya Sukses and Catur Sentosa 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 Jaya Sukses with a short position of Catur Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaya Sukses and Catur Sentosa.

Diversification Opportunities for Jaya Sukses and Catur Sentosa

-0.57

Correlation Coefficient

Jaya Sukses  Catur Sentosa

Excellent diversification

The 3 months correlation between Jaya and Catur is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Sukses Makmur and Catur Sentosa Adiprana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catur Sentosa Adiprana and Jaya Sukses 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 Jaya Sukses Makmur are associated (or correlated) with Catur Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catur Sentosa Adiprana has no effect on the direction of Jaya Sukses i.e., Jaya Sukses and Catur Sentosa go up and down completely randomly.

Pair Corralation between Jaya Sukses and Catur Sentosa

Assuming the 90 days trading horizon Jaya Sukses Makmur is expected to generate 0.17 times more return on investment than Catur Sentosa. However, Jaya Sukses Makmur is 5.75 times less risky than Catur Sentosa. It trades about 0.05 of its potential returns per unit of risk. Catur Sentosa Adiprana is currently generating about -0.03 per unit of risk. If you would invest  99,000  in Jaya Sukses Makmur on September 13, 2024 and sell it today you would earn a total of  1,500  from holding Jaya Sukses Makmur or generate 1.52% return on investment over 90 days.

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

Jaya Sukses Makmur  vs.  Catur Sentosa Adiprana

Jaya Sukses Makmur

Risk-Adjusted Performance

4 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jaya Sukses Makmur are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Jaya Sukses is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Catur Sentosa Adiprana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catur Sentosa Adiprana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Catur Sentosa 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 Jaya Sukses and Catur Sentosa

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

The idea behind Jaya Sukses Makmur and Catur Sentosa Adiprana 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.