Correlation Between IDX 30 and Krakatau Steel
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By analyzing existing cross correlation between IDX 30 Jakarta and Krakatau Steel Persero, you can compare the effects of market volatilities on IDX 30 and Krakatau Steel 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 IDX 30 with a short position of Krakatau Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDX 30 and Krakatau Steel.
Diversification Opportunities for IDX 30 and Krakatau Steel
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IDX and Krakatau is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding IDX 30 Jakarta and Krakatau Steel Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krakatau Steel Persero and IDX 30 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 IDX 30 Jakarta are associated (or correlated) with Krakatau Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krakatau Steel Persero has no effect on the direction of IDX 30 i.e., IDX 30 and Krakatau Steel go up and down completely randomly.
Pair Corralation between IDX 30 and Krakatau Steel
Assuming the 90 days trading horizon IDX 30 Jakarta is expected to generate 0.39 times more return on investment than Krakatau Steel. However, IDX 30 Jakarta is 2.53 times less risky than Krakatau Steel. It trades about -0.26 of its potential returns per unit of risk. Krakatau Steel Persero is currently generating about -0.33 per unit of risk. If you would invest 47,624 in IDX 30 Jakarta on August 31, 2024 and sell it today you would lose (2,849) from holding IDX 30 Jakarta or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDX 30 Jakarta vs. Krakatau Steel Persero
Performance |
| Timeline |
IDX 30 and Krakatau Steel Volatility Contrast
Predicted Return Density |
| Returns |
IDX 30 Jakarta
Pair trading matchups for IDX 30
Krakatau Steel Persero
Pair trading matchups for Krakatau Steel
Pair Trading with IDX 30 and Krakatau Steel
The main advantage of trading using opposite IDX 30 and Krakatau Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDX 30 position performs unexpectedly, Krakatau Steel 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 Krakatau Steel will offset losses from the drop in Krakatau Steel's long position.| IDX 30 vs. Victoria Insurance Tbk | IDX 30 vs. Indo Acidatama Tbk | IDX 30 vs. PT Data Sinergitama | IDX 30 vs. Garudafood Putra Putri |
| Krakatau Steel vs. Perusahaan Gas Negara | Krakatau Steel vs. Vale Indonesia Tbk | Krakatau Steel vs. Telkom Indonesia Tbk | Krakatau Steel vs. Mitra Pinasthika Mustika |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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