Correlation Between Sepatu Bata and Indo Kordsa
Can any of the company-specific risk be diversified away by investing in both Sepatu Bata and Indo Kordsa 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 Sepatu Bata and Indo Kordsa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sepatu Bata Tbk and Indo Kordsa Tbk, you can compare the effects of market volatilities on Sepatu Bata and Indo Kordsa 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 Sepatu Bata with a short position of Indo Kordsa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sepatu Bata and Indo Kordsa.
Diversification Opportunities for Sepatu Bata and Indo Kordsa
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sepatu and Indo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sepatu Bata Tbk and Indo Kordsa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Kordsa Tbk and Sepatu Bata 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 Sepatu Bata Tbk are associated (or correlated) with Indo Kordsa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Kordsa Tbk has no effect on the direction of Sepatu Bata i.e., Sepatu Bata and Indo Kordsa go up and down completely randomly.
Pair Corralation between Sepatu Bata and Indo Kordsa
Assuming the 90 days trading horizon Sepatu Bata is expected to generate 1.32 times less return on investment than Indo Kordsa. But when comparing it to its historical volatility, Sepatu Bata Tbk is 1.75 times less risky than Indo Kordsa. It trades about 0.11 of its potential returns per unit of risk. Indo Kordsa Tbk is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 572,500 in Indo Kordsa Tbk on November 4, 2024 and sell it today you would earn a total of 15,000 from holding Indo Kordsa Tbk or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Sepatu Bata Tbk vs. Indo Kordsa Tbk
Performance |
| Timeline |
| Sepatu Bata Tbk |
| Indo Kordsa Tbk |
Sepatu Bata and Indo Kordsa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sepatu Bata and Indo Kordsa
The main advantage of trading using opposite Sepatu Bata and Indo Kordsa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sepatu Bata position performs unexpectedly, Indo Kordsa 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 Indo Kordsa will offset losses from the drop in Indo Kordsa's long position.| Sepatu Bata vs. Indo Kordsa Tbk | Sepatu Bata vs. Goodyear Indonesia Tbk | Sepatu Bata vs. Ever Shine Textile |
| Indo Kordsa vs. Goodyear Indonesia Tbk | Indo Kordsa vs. Sepatu Bata Tbk | Indo Kordsa vs. Indospring Tbk | Indo Kordsa vs. Ever Shine Textile |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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