Correlation Between PT Global and KRAKATAU STEEL
Can any of the company-specific risk be diversified away by investing in both PT Global and KRAKATAU STEEL 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 PT Global and KRAKATAU STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Global Mediacom and KRAKATAU STEEL B , you can compare the effects of market volatilities on PT Global and KRAKATAU STEEL 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 PT Global with a short position of KRAKATAU STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Global and KRAKATAU STEEL.
Diversification Opportunities for PT Global and KRAKATAU STEEL
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 06L and KRAKATAU is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding PT Global Mediacom and KRAKATAU STEEL B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAKATAU STEEL B and PT Global 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 PT Global Mediacom are associated (or correlated) with KRAKATAU STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAKATAU STEEL B has no effect on the direction of PT Global i.e., PT Global and KRAKATAU STEEL go up and down completely randomly.
Pair Corralation between PT Global and KRAKATAU STEEL
If you would invest 0.60 in KRAKATAU STEEL B on September 14, 2024 and sell it today you would earn a total of 0.00 from holding KRAKATAU STEEL B or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Global Mediacom vs. KRAKATAU STEEL B
Performance |
| Timeline |
| PT Global Mediacom |
| KRAKATAU STEEL B |
PT Global and KRAKATAU STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Global and KRAKATAU STEEL
The main advantage of trading using opposite PT Global and KRAKATAU STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Global position performs unexpectedly, KRAKATAU STEEL 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 KRAKATAU STEEL will offset losses from the drop in KRAKATAU STEEL's long position.| PT Global vs. The Walt Disney | PT Global vs. Charter Communications | PT Global vs. Warner Music Group | PT Global vs. Superior Plus Corp |
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Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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