Correlation Between Colorpak Indonesia and Indo Kordsa
Can any of the company-specific risk be diversified away by investing in both Colorpak Indonesia 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 Colorpak Indonesia and Indo Kordsa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colorpak Indonesia Tbk and Indo Kordsa Tbk, you can compare the effects of market volatilities on Colorpak Indonesia 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 Colorpak Indonesia with a short position of Indo Kordsa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colorpak Indonesia and Indo Kordsa.
Diversification Opportunities for Colorpak Indonesia and Indo Kordsa
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Colorpak and Indo is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Colorpak Indonesia 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 Colorpak Indonesia 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 Colorpak Indonesia 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 Colorpak Indonesia i.e., Colorpak Indonesia and Indo Kordsa go up and down completely randomly.
Pair Corralation between Colorpak Indonesia and Indo Kordsa
Assuming the 90 days trading horizon Colorpak Indonesia Tbk is expected to under-perform the Indo Kordsa. But the stock apears to be less risky and, when comparing its historical volatility, Colorpak Indonesia Tbk is 7.44 times less risky than Indo Kordsa. The stock trades about -0.28 of its potential returns per unit of risk. The Indo Kordsa Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 591,231 in Indo Kordsa Tbk on September 4, 2024 and sell it today you would lose (3,731) from holding Indo Kordsa Tbk or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Colorpak Indonesia Tbk vs. Indo Kordsa Tbk
Performance |
| Timeline |
| Colorpak Indonesia Tbk |
| Indo Kordsa Tbk |
Colorpak Indonesia and Indo Kordsa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colorpak Indonesia and Indo Kordsa
The main advantage of trading using opposite Colorpak Indonesia and Indo Kordsa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colorpak Indonesia 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.| Colorpak Indonesia vs. Ekadharma International Tbk | Colorpak Indonesia vs. Enseval Putra Megatrading | Colorpak Indonesia vs. Duta Pertiwi Nusantara | Colorpak Indonesia vs. Wilmar Cahaya Indonesia |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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