Correlation Between Satyamitra Kemas and Jasnita Telekomindo

Can any of the company-specific risk be diversified away by investing in both Satyamitra Kemas and Jasnita Telekomindo 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 Satyamitra Kemas and Jasnita Telekomindo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Satyamitra Kemas Lestari and Jasnita Telekomindo Tbk, you can compare the effects of market volatilities on Satyamitra Kemas and Jasnita Telekomindo 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 Satyamitra Kemas with a short position of Jasnita Telekomindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satyamitra Kemas and Jasnita Telekomindo.

Diversification Opportunities for Satyamitra Kemas and Jasnita Telekomindo

0.55

Correlation Coefficient

Satyamitra Kemas  Jasnita Telekomindo

Very weak diversification

The 3 months correlation between Satyamitra and Jasnita is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Satyamitra Kemas Lestari and Jasnita Telekomindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasnita Telekomindo Tbk and Satyamitra Kemas 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 Satyamitra Kemas Lestari are associated (or correlated) with Jasnita Telekomindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasnita Telekomindo Tbk has no effect on the direction of Satyamitra Kemas i.e., Satyamitra Kemas and Jasnita Telekomindo go up and down completely randomly.

Pair Corralation between Satyamitra Kemas and Jasnita Telekomindo

Assuming the 90 days trading horizon Satyamitra Kemas Lestari is expected to under-perform the Jasnita Telekomindo. But the stock apears to be less risky and, when comparing its historical volatility, Satyamitra Kemas Lestari is 1.5 times less risky than Jasnita Telekomindo. The stock trades about -0.2 of its potential returns per unit of risk. The Jasnita Telekomindo Tbk is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  5,600  in Jasnita Telekomindo Tbk on September 19, 2024 and sell it today you would lose (500.00) from holding Jasnita Telekomindo Tbk or give up 8.93% of portfolio value over 90 days.

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

Satyamitra Kemas Lestari  vs.  Jasnita Telekomindo Tbk

Satyamitra Kemas Lestari

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Satyamitra Kemas Lestari has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting 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.

Jasnita Telekomindo Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasnita Telekomindo Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Satyamitra Kemas and Jasnita Telekomindo

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

The idea behind Satyamitra Kemas Lestari and Jasnita Telekomindo 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.