Correlation Between Indo Kordsa and Link Net
Can any of the company-specific risk be diversified away by investing in both Indo Kordsa and Link Net 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 Indo Kordsa and Link Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Kordsa Tbk and Link Net Tbk, you can compare the effects of market volatilities on Indo Kordsa and Link Net 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 Indo Kordsa with a short position of Link Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Kordsa and Link Net.
Diversification Opportunities for Indo Kordsa and Link Net
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indo and Link is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Indo Kordsa Tbk and Link Net Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Link Net Tbk and Indo Kordsa 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 Indo Kordsa Tbk are associated (or correlated) with Link Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Link Net Tbk has no effect on the direction of Indo Kordsa i.e., Indo Kordsa and Link Net go up and down completely randomly.
Pair Corralation between Indo Kordsa and Link Net
Assuming the 90 days trading horizon Indo Kordsa Tbk is expected to generate 0.64 times more return on investment than Link Net. However, Indo Kordsa Tbk is 1.57 times less risky than Link Net. It trades about 0.02 of its potential returns per unit of risk. Link Net Tbk is currently generating about -0.23 per unit of risk. If you would invest 576,692 in Indo Kordsa Tbk on August 26, 2024 and sell it today you would earn a total of 5,808 from holding Indo Kordsa Tbk or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Kordsa Tbk vs. Link Net Tbk
Performance |
| Timeline |
| Indo Kordsa Tbk |
| Link Net Tbk |
Indo Kordsa and Link Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Kordsa and Link Net
The main advantage of trading using opposite Indo Kordsa and Link Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Kordsa position performs unexpectedly, Link Net 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 Link Net will offset losses from the drop in Link Net's long position.| Indo Kordsa vs. Goodyear Indonesia Tbk | Indo Kordsa vs. Sepatu Bata Tbk | Indo Kordsa vs. Indospring Tbk | Indo Kordsa vs. Ever Shine Textile |
| Link Net vs. Mnc Land Tbk | Link Net vs. MNC Vision Networks | Link Net vs. MD Pictures Tbk | Link Net vs. Medikaloka Hermina PT |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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