Correlation Between Gozco Plantations and Kalbe Farma
Can any of the company-specific risk be diversified away by investing in both Gozco Plantations 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 Gozco Plantations and Kalbe Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gozco Plantations Tbk and Kalbe Farma Tbk, you can compare the effects of market volatilities on Gozco Plantations 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 Gozco Plantations with a short position of Kalbe Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gozco Plantations and Kalbe Farma.
Diversification Opportunities for Gozco Plantations and Kalbe Farma
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gozco and Kalbe is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Gozco Plantations 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 Gozco Plantations 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 Gozco Plantations 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 Gozco Plantations i.e., Gozco Plantations and Kalbe Farma go up and down completely randomly.
Pair Corralation between Gozco Plantations and Kalbe Farma
Assuming the 90 days trading horizon Gozco Plantations Tbk is expected to generate 1.42 times more return on investment than Kalbe Farma. However, Gozco Plantations is 1.42 times more volatile than Kalbe Farma Tbk. It trades about -0.07 of its potential returns per unit of risk. Kalbe Farma Tbk is currently generating about -0.23 per unit of risk. If you would invest 10,200 in Gozco Plantations Tbk on August 28, 2024 and sell it today you would lose (400.00) from holding Gozco Plantations Tbk or give up 3.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gozco Plantations Tbk vs. Kalbe Farma Tbk
Performance |
| Timeline |
| Gozco Plantations Tbk |
| Kalbe Farma Tbk |
Gozco Plantations and Kalbe Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gozco Plantations and Kalbe Farma
The main advantage of trading using opposite Gozco Plantations and Kalbe Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gozco Plantations 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.The idea behind Gozco Plantations Tbk and Kalbe Farma Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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