Correlation Between Jaya Sukses and Putra Mandiri

Can any of the company-specific risk be diversified away by investing in both Jaya Sukses and Putra Mandiri 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 Putra Mandiri 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 Putra Mandiri Jembar, you can compare the effects of market volatilities on Jaya Sukses and Putra Mandiri 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 Putra Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaya Sukses and Putra Mandiri.

Diversification Opportunities for Jaya Sukses and Putra Mandiri

-0.26

Correlation Coefficient

Jaya Sukses  Putra Mandiri

Very good diversification

The 3 months correlation between Jaya and Putra is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Sukses Makmur and Putra Mandiri Jembar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Mandiri Jembar 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 Putra Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Mandiri Jembar has no effect on the direction of Jaya Sukses i.e., Jaya Sukses and Putra Mandiri go up and down completely randomly.

Pair Corralation between Jaya Sukses and Putra Mandiri

Assuming the 90 days trading horizon Jaya Sukses Makmur is expected to generate 0.09 times more return on investment than Putra Mandiri. However, Jaya Sukses Makmur is 10.78 times less risky than Putra Mandiri. It trades about 0.34 of its potential returns per unit of risk. Putra Mandiri Jembar is currently generating about -0.09 per unit of risk. If you would invest  98,500  in Jaya Sukses Makmur on September 12, 2024 and sell it today you would earn a total of  7,000  from holding Jaya Sukses Makmur or generate 7.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Jaya Sukses Makmur  vs.  Putra Mandiri Jembar

Jaya Sukses Makmur

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Jaya Sukses Makmur are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Jaya Sukses may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Putra Mandiri Jembar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putra Mandiri Jembar has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Jaya Sukses and Putra Mandiri

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

The idea behind Jaya Sukses Makmur and Putra Mandiri Jembar 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.