Correlation Between Erajaya Swasembada and Kalbe Farma
Can any of the company-specific risk be diversified away by investing in both Erajaya Swasembada and Kalbe Farma 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 Erajaya Swasembada and Kalbe Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erajaya Swasembada Tbk and Kalbe Farma Tbk, you can compare the effects of market volatilities on Erajaya Swasembada and Kalbe Farma 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 Erajaya Swasembada with a short position of Kalbe Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erajaya Swasembada and Kalbe Farma.
Diversification Opportunities for Erajaya Swasembada and Kalbe Farma
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Erajaya and Kalbe is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Erajaya Swasembada Tbk and Kalbe Farma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalbe Farma Tbk and Erajaya Swasembada 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 Erajaya Swasembada Tbk are associated (or correlated) with Kalbe Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalbe Farma Tbk has no effect on the direction of Erajaya Swasembada i.e., Erajaya Swasembada and Kalbe Farma go up and down completely randomly.
Pair Corralation between Erajaya Swasembada and Kalbe Farma
Assuming the 90 days trading horizon Erajaya Swasembada Tbk is expected to generate 1.53 times more return on investment than Kalbe Farma. However, Erajaya Swasembada is 1.53 times more volatile than Kalbe Farma Tbk. It trades about 0.04 of its potential returns per unit of risk. Kalbe Farma Tbk is currently generating about -0.07 per unit of risk. If you would invest 38,000 in Erajaya Swasembada Tbk on November 28, 2024 and sell it today you would earn a total of 800.00 from holding Erajaya Swasembada Tbk or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erajaya Swasembada Tbk vs. Kalbe Farma Tbk
Performance |
| Timeline |
| Erajaya Swasembada Tbk |
| Kalbe Farma Tbk |
Erajaya Swasembada and Kalbe Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erajaya Swasembada and Kalbe Farma
The main advantage of trading using opposite Erajaya Swasembada and Kalbe Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erajaya Swasembada position performs unexpectedly, Kalbe Farma 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 Kalbe Farma will offset losses from the drop in Kalbe Farma's long position.| Erajaya Swasembada vs. Ace Hardware Indonesia | Erajaya Swasembada vs. Japfa Comfeed Indonesia | Erajaya Swasembada vs. XL Axiata Tbk | Erajaya Swasembada vs. Pembangunan Perumahan PT |
| Kalbe Farma vs. PT Indofood Sukses | Kalbe Farma vs. Unilever Indonesia Tbk | Kalbe Farma vs. Semen Indonesia Persero | Kalbe Farma vs. United Tractors 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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