Correlation Between Indo Kordsa and Prima Andalan
Can any of the company-specific risk be diversified away by investing in both Indo Kordsa and Prima Andalan 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 Prima Andalan 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 Prima Andalan Mandiri, you can compare the effects of market volatilities on Indo Kordsa and Prima Andalan 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 Prima Andalan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Kordsa and Prima Andalan.
Diversification Opportunities for Indo Kordsa and Prima Andalan
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indo and Prima is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Indo Kordsa Tbk and Prima Andalan Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Andalan Mandiri 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 Prima Andalan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Andalan Mandiri has no effect on the direction of Indo Kordsa i.e., Indo Kordsa and Prima Andalan go up and down completely randomly.
Pair Corralation between Indo Kordsa and Prima Andalan
Assuming the 90 days trading horizon Indo Kordsa Tbk is expected to under-perform the Prima Andalan. In addition to that, Indo Kordsa is 1.11 times more volatile than Prima Andalan Mandiri. It trades about -0.02 of its total potential returns per unit of risk. Prima Andalan Mandiri is currently generating about 0.01 per unit of volatility. If you would invest 522,876 in Prima Andalan Mandiri on August 30, 2024 and sell it today you would earn a total of 9,624 from holding Prima Andalan Mandiri or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Indo Kordsa Tbk vs. Prima Andalan Mandiri
Performance |
| Timeline |
| Indo Kordsa Tbk |
| Prima Andalan Mandiri |
Indo Kordsa and Prima Andalan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Kordsa and Prima Andalan
The main advantage of trading using opposite Indo Kordsa and Prima Andalan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Kordsa position performs unexpectedly, Prima Andalan 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 Prima Andalan will offset losses from the drop in Prima Andalan'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 |
| Prima Andalan vs. Baramulti Suksessarana Tbk | Prima Andalan vs. Mitrabara Adiperdana PT | Prima Andalan vs. Adaro Minerals Indonesia | Prima Andalan vs. RMK Energy 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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