Correlation Between Colorpak Indonesia and Fks Multi
Can any of the company-specific risk be diversified away by investing in both Colorpak Indonesia and Fks Multi 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 Fks Multi 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 Fks Multi Agro, you can compare the effects of market volatilities on Colorpak Indonesia and Fks Multi 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 Fks Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colorpak Indonesia and Fks Multi.
Diversification Opportunities for Colorpak Indonesia and Fks Multi
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Colorpak and Fks is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Colorpak Indonesia Tbk and Fks Multi Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fks Multi Agro 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 Fks Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fks Multi Agro has no effect on the direction of Colorpak Indonesia i.e., Colorpak Indonesia and Fks Multi go up and down completely randomly.
Pair Corralation between Colorpak Indonesia and Fks Multi
Assuming the 90 days trading horizon Colorpak Indonesia is expected to generate 2.34 times less return on investment than Fks Multi. But when comparing it to its historical volatility, Colorpak Indonesia Tbk is 2.47 times less risky than Fks Multi. It trades about 0.08 of its potential returns per unit of risk. Fks Multi Agro is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 601,782 in Fks Multi Agro on August 29, 2024 and sell it today you would earn a total of 488,218 from holding Fks Multi Agro or generate 81.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Colorpak Indonesia Tbk vs. Fks Multi Agro
Performance |
| Timeline |
| Colorpak Indonesia Tbk |
| Fks Multi Agro |
Colorpak Indonesia and Fks Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colorpak Indonesia and Fks Multi
The main advantage of trading using opposite Colorpak Indonesia and Fks Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colorpak Indonesia position performs unexpectedly, Fks Multi 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 Fks Multi will offset losses from the drop in Fks Multi's long position.| Colorpak Indonesia vs. Kedaung Indah Can | Colorpak Indonesia vs. Langgeng Makmur Industri | Colorpak Indonesia vs. Kabelindo Murni Tbk | Colorpak Indonesia vs. Mustika Ratu Tbk |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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