Correlation Between Alam Sutera and Kawasan Industri
Can any of the company-specific risk be diversified away by investing in both Alam Sutera and Kawasan Industri 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 Alam Sutera and Kawasan Industri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alam Sutera Realty and Kawasan Industri Jababeka, you can compare the effects of market volatilities on Alam Sutera and Kawasan Industri 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 Alam Sutera with a short position of Kawasan Industri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alam Sutera and Kawasan Industri.
Diversification Opportunities for Alam Sutera and Kawasan Industri
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alam and Kawasan is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Alam Sutera Realty and Kawasan Industri Jababeka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawasan Industri Jababeka and Alam Sutera 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 Alam Sutera Realty are associated (or correlated) with Kawasan Industri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawasan Industri Jababeka has no effect on the direction of Alam Sutera i.e., Alam Sutera and Kawasan Industri go up and down completely randomly.
Pair Corralation between Alam Sutera and Kawasan Industri
Assuming the 90 days trading horizon Alam Sutera is expected to generate 3.02 times less return on investment than Kawasan Industri. In addition to that, Alam Sutera is 1.2 times more volatile than Kawasan Industri Jababeka. It trades about 0.02 of its total potential returns per unit of risk. Kawasan Industri Jababeka is currently generating about 0.06 per unit of volatility. If you would invest 12,600 in Kawasan Industri Jababeka on August 24, 2024 and sell it today you would earn a total of 6,800 from holding Kawasan Industri Jababeka or generate 53.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alam Sutera Realty vs. Kawasan Industri Jababeka
Performance |
| Timeline |
| Alam Sutera Realty |
| Kawasan Industri Jababeka |
Alam Sutera and Kawasan Industri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alam Sutera and Kawasan Industri
The main advantage of trading using opposite Alam Sutera and Kawasan Industri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alam Sutera position performs unexpectedly, Kawasan Industri 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 Kawasan Industri will offset losses from the drop in Kawasan Industri's long position.| Alam Sutera vs. Bumi Serpong Damai | Alam Sutera vs. Summarecon Agung Tbk | Alam Sutera vs. Lippo Karawaci Tbk | Alam Sutera vs. Ciputra Development Tbk |
| Kawasan Industri vs. Ciputra Development Tbk | Kawasan Industri vs. Bumi Serpong Damai | Kawasan Industri vs. Alam Sutera Realty | Kawasan Industri vs. Lippo Karawaci 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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