Correlation Between HK Metals and Kedawung Setia
Can any of the company-specific risk be diversified away by investing in both HK Metals and Kedawung Setia 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 HK Metals and Kedawung Setia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HK Metals Utama and Kedawung Setia Industrial, you can compare the effects of market volatilities on HK Metals and Kedawung Setia 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 HK Metals with a short position of Kedawung Setia. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Metals and Kedawung Setia.
Diversification Opportunities for HK Metals and Kedawung Setia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HKMU and Kedawung is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HK Metals Utama and Kedawung Setia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedawung Setia Industrial and HK Metals 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 HK Metals Utama are associated (or correlated) with Kedawung Setia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedawung Setia Industrial has no effect on the direction of HK Metals i.e., HK Metals and Kedawung Setia go up and down completely randomly.
Pair Corralation between HK Metals and Kedawung Setia
If you would invest 18,135 in Kedawung Setia Industrial on September 4, 2024 and sell it today you would earn a total of 25,265 from holding Kedawung Setia Industrial or generate 139.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
HK Metals Utama vs. Kedawung Setia Industrial
Performance |
| Timeline |
| HK Metals Utama |
| Kedawung Setia Industrial |
HK Metals and Kedawung Setia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Metals and Kedawung Setia
The main advantage of trading using opposite HK Metals and Kedawung Setia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Metals position performs unexpectedly, Kedawung Setia 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 Kedawung Setia will offset losses from the drop in Kedawung Setia's long position.| HK Metals vs. PT Indonesia Kendaraan | HK Metals vs. Wijaya Karya Bangunan | HK Metals vs. Buyung Poetra Sembada | HK Metals vs. J Resources Asia |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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