Correlation Between Capital Financial and PT Kusuma
Can any of the company-specific risk be diversified away by investing in both Capital Financial and PT Kusuma 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 Capital Financial and PT Kusuma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Financial Indonesia and PT Kusuma Kemindo, you can compare the effects of market volatilities on Capital Financial and PT Kusuma 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 Capital Financial with a short position of PT Kusuma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Financial and PT Kusuma.
Diversification Opportunities for Capital Financial and PT Kusuma
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and KKES is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Capital Financial Indonesia and PT Kusuma Kemindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Kusuma Kemindo and Capital Financial 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 Capital Financial Indonesia are associated (or correlated) with PT Kusuma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Kusuma Kemindo has no effect on the direction of Capital Financial i.e., Capital Financial and PT Kusuma go up and down completely randomly.
Pair Corralation between Capital Financial and PT Kusuma
Assuming the 90 days trading horizon Capital Financial Indonesia is expected to generate 0.67 times more return on investment than PT Kusuma. However, Capital Financial Indonesia is 1.5 times less risky than PT Kusuma. It trades about -0.02 of its potential returns per unit of risk. PT Kusuma Kemindo is currently generating about -0.07 per unit of risk. If you would invest 72,500 in Capital Financial Indonesia on September 12, 2024 and sell it today you would lose (21,000) from holding Capital Financial Indonesia or give up 28.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Financial Indonesia vs. PT Kusuma Kemindo
Performance |
| Timeline |
| Capital Financial |
| PT Kusuma Kemindo |
Capital Financial and PT Kusuma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Financial and PT Kusuma
The main advantage of trading using opposite Capital Financial and PT Kusuma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Financial position performs unexpectedly, PT Kusuma 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 PT Kusuma will offset losses from the drop in PT Kusuma's long position.| Capital Financial vs. Pacific Strategic Financial | Capital Financial vs. Bk Harda Internasional | Capital Financial vs. Indoritel Makmur Internasional | Capital Financial vs. Bank Sinarmas Tbk |
| PT Kusuma vs. PT Hetzer Medical | PT Kusuma vs. Bangun Karya Perkasa | PT Kusuma vs. PT Dewi Shri | PT Kusuma vs. PT Sari Kreasi |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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