Correlation Between Telefast Indonesia and Jakarta Setiabudi

Can any of the company-specific risk be diversified away by investing in both Telefast Indonesia and Jakarta Setiabudi 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 Telefast Indonesia and Jakarta Setiabudi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Telefast Indonesia and Jakarta Setiabudi Internasional, you can compare the effects of market volatilities on Telefast Indonesia and Jakarta Setiabudi 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 Telefast Indonesia with a short position of Jakarta Setiabudi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefast Indonesia and Jakarta Setiabudi.

Diversification Opportunities for Telefast Indonesia and Jakarta Setiabudi

-0.79

Correlation Coefficient

Telefast Indonesia  Jakarta Setiabudi

Pay attention - limited upside

The 3 months correlation between Telefast and Jakarta is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Telefast Indonesia and Jakarta Setiabudi Internasiona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jakarta Setiabudi and Telefast Indonesia 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 Telefast Indonesia are associated (or correlated) with Jakarta Setiabudi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jakarta Setiabudi has no effect on the direction of Telefast Indonesia i.e., Telefast Indonesia and Jakarta Setiabudi go up and down completely randomly.

Pair Corralation between Telefast Indonesia and Jakarta Setiabudi

Assuming the 90 days trading horizon Telefast Indonesia is expected to generate 0.54 times more return on investment than Jakarta Setiabudi. However, Telefast Indonesia is 1.86 times less risky than Jakarta Setiabudi. It trades about 0.15 of its potential returns per unit of risk. Jakarta Setiabudi Internasional is currently generating about -0.08 per unit of risk. If you would invest  10,500  in Telefast Indonesia on April 23, 2025 and sell it today you would earn a total of  2,900  from holding Telefast Indonesia or generate 27.62% return on investment over 90 days.

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

Telefast Indonesia  vs.  Jakarta Setiabudi Internasiona

Telefast Indonesia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telefast Indonesia are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Telefast Indonesia disclosed solid returns over the last few months and may actually be approaching a breakup point.

Jakarta Setiabudi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jakarta Setiabudi Internasional 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 August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Telefast Indonesia and Jakarta Setiabudi

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

The idea behind Telefast Indonesia and Jakarta Setiabudi Internasional 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.