Correlation Between Amgen and PT Kalbe
Can any of the company-specific risk be diversified away by investing in both Amgen and PT Kalbe 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 Amgen and PT Kalbe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and PT Kalbe Farma, you can compare the effects of market volatilities on Amgen and PT Kalbe 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 Amgen with a short position of PT Kalbe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and PT Kalbe.
Diversification Opportunities for Amgen and PT Kalbe
Poor diversification
The 3 months correlation between Amgen and PTKFF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and PT Kalbe Farma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Kalbe Farma and Amgen 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 Amgen Inc are associated (or correlated) with PT Kalbe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Kalbe Farma has no effect on the direction of Amgen i.e., Amgen and PT Kalbe go up and down completely randomly.
Pair Corralation between Amgen and PT Kalbe
Given the investment horizon of 90 days Amgen Inc is expected to generate 0.7 times more return on investment than PT Kalbe. However, Amgen Inc is 1.43 times less risky than PT Kalbe. It trades about -0.12 of its potential returns per unit of risk. PT Kalbe Farma is currently generating about -0.21 per unit of risk. If you would invest 31,319 in Amgen Inc on August 25, 2024 and sell it today you would lose (1,866) from holding Amgen Inc or give up 5.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amgen Inc vs. PT Kalbe Farma
Performance |
| Timeline |
| Amgen Inc |
| PT Kalbe Farma |
Amgen and PT Kalbe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and PT Kalbe
The main advantage of trading using opposite Amgen and PT Kalbe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, PT Kalbe 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 PT Kalbe will offset losses from the drop in PT Kalbe's long position.The idea behind Amgen Inc and PT Kalbe Farma 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.| PT Kalbe vs. Amgen Inc | PT Kalbe vs. Bristol Myers Squibb | PT Kalbe vs. Roche Holding AG | PT Kalbe vs. Novartis AG |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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