Correlation Between Asiaplast Industries and Kedaung Indah
Can any of the company-specific risk be diversified away by investing in both Asiaplast Industries and Kedaung Indah 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 Asiaplast Industries and Kedaung Indah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiaplast Industries Tbk and Kedaung Indah Can, you can compare the effects of market volatilities on Asiaplast Industries and Kedaung Indah 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 Asiaplast Industries with a short position of Kedaung Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiaplast Industries and Kedaung Indah.
Diversification Opportunities for Asiaplast Industries and Kedaung Indah
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asiaplast and Kedaung is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Asiaplast Industries Tbk and Kedaung Indah Can in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedaung Indah Can and Asiaplast Industries 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 Asiaplast Industries Tbk are associated (or correlated) with Kedaung Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedaung Indah Can has no effect on the direction of Asiaplast Industries i.e., Asiaplast Industries and Kedaung Indah go up and down completely randomly.
Pair Corralation between Asiaplast Industries and Kedaung Indah
Assuming the 90 days trading horizon Asiaplast Industries Tbk is expected to generate 1.46 times more return on investment than Kedaung Indah. However, Asiaplast Industries is 1.46 times more volatile than Kedaung Indah Can. It trades about -0.05 of its potential returns per unit of risk. Kedaung Indah Can is currently generating about -0.4 per unit of risk. If you would invest 56,500 in Asiaplast Industries Tbk on August 28, 2024 and sell it today you would lose (2,500) from holding Asiaplast Industries Tbk or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Asiaplast Industries Tbk vs. Kedaung Indah Can
Performance |
| Timeline |
| Asiaplast Industries Tbk |
| Kedaung Indah Can |
Asiaplast Industries and Kedaung Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiaplast Industries and Kedaung Indah
The main advantage of trading using opposite Asiaplast Industries and Kedaung Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiaplast Industries position performs unexpectedly, Kedaung Indah 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 Kedaung Indah will offset losses from the drop in Kedaung Indah's long position.| Asiaplast Industries vs. Kedaung Indah Can | Asiaplast Industries vs. Langgeng Makmur Industri | Asiaplast Industries vs. Kabelindo Murni Tbk | Asiaplast Industries vs. Mustika Ratu Tbk |
| Kedaung Indah vs. Langgeng Makmur Industri | Kedaung Indah vs. Kedawung Setia Industrial | Kedaung Indah vs. Mustika Ratu Tbk | Kedaung Indah vs. Kabelindo Murni Tbk |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |