Correlation Between Modern Internasional and Jaya Sukses

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

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

Diversification Opportunities for Modern Internasional and Jaya Sukses

-0.04

Correlation Coefficient

Modern Internasional  Jaya Sukses

Good diversification

The 3 months correlation between Modern and Jaya is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Modern Internasional Tbk and Jaya Sukses Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Sukses Makmur and Modern Internasional 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 Modern Internasional Tbk are associated (or correlated) with Jaya Sukses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Sukses Makmur has no effect on the direction of Modern Internasional i.e., Modern Internasional and Jaya Sukses go up and down completely randomly.

Pair Corralation between Modern Internasional and Jaya Sukses

If you would invest  500.00  in Modern Internasional Tbk on February 7, 2024 and sell it today you would earn a total of  0.00  from holding Modern Internasional Tbk or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.33%
Values	Daily Returns

Modern Internasional Tbk  vs.  Jaya Sukses Makmur

Modern Internasional Tbk

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Modern Internasional Tbk are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Modern Internasional disclosed solid returns over the last few months and may actually be approaching a breakup point.

Jaya Sukses Makmur

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Modern Internasional and Jaya Sukses

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

The idea behind Modern Internasional Tbk and Jaya Sukses Makmur 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.