Correlation Between Indonesia Fibreboard and PT Kusuma
Can any of the company-specific risk be diversified away by investing in both Indonesia Fibreboard and PT Kusuma 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 Indonesia Fibreboard and PT Kusuma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indonesia Fibreboard Industry and PT Kusuma Kemindo, you can compare the effects of market volatilities on Indonesia Fibreboard and PT Kusuma 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 Indonesia Fibreboard with a short position of PT Kusuma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Fibreboard and PT Kusuma.
Diversification Opportunities for Indonesia Fibreboard and PT Kusuma
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Indonesia and KKES is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Fibreboard Industry and PT Kusuma Kemindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Kusuma Kemindo and Indonesia Fibreboard 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 Indonesia Fibreboard Industry are associated (or correlated) with PT Kusuma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Kusuma Kemindo has no effect on the direction of Indonesia Fibreboard i.e., Indonesia Fibreboard and PT Kusuma go up and down completely randomly.
Pair Corralation between Indonesia Fibreboard and PT Kusuma
Assuming the 90 days trading horizon Indonesia Fibreboard Industry is expected to generate 1.83 times more return on investment than PT Kusuma. However, Indonesia Fibreboard is 1.83 times more volatile than PT Kusuma Kemindo. It trades about 0.02 of its potential returns per unit of risk. PT Kusuma Kemindo is currently generating about -0.47 per unit of risk. If you would invest 20,095 in Indonesia Fibreboard Industry on September 2, 2024 and sell it today you would earn a total of 105.00 from holding Indonesia Fibreboard Industry or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indonesia Fibreboard Industry vs. PT Kusuma Kemindo
Performance |
| Timeline |
| Indonesia Fibreboard |
| PT Kusuma Kemindo |
Indonesia Fibreboard and PT Kusuma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Fibreboard and PT Kusuma
The main advantage of trading using opposite Indonesia Fibreboard and PT Kusuma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Fibreboard position performs unexpectedly, PT Kusuma 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 PT Kusuma will offset losses from the drop in PT Kusuma's long position.| Indonesia Fibreboard vs. Gunung Raja Paksi | Indonesia Fibreboard vs. Satyamitra Kemas Lestari | Indonesia Fibreboard vs. Ifishdeco PT | Indonesia Fibreboard vs. Saraswanti Anugerah Makmur |
| PT Kusuma vs. PT Hetzer Medical | PT Kusuma vs. Bangun Karya Perkasa | PT Kusuma vs. PT Dewi Shri | PT Kusuma vs. PT Sari Kreasi |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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