Correlation Between Sumi Indo and Kabelindo Murni
Can any of the company-specific risk be diversified away by investing in both Sumi Indo and Kabelindo Murni 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 Sumi Indo and Kabelindo Murni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumi Indo Kabel and Kabelindo Murni Tbk, you can compare the effects of market volatilities on Sumi Indo and Kabelindo Murni 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 Sumi Indo with a short position of Kabelindo Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumi Indo and Kabelindo Murni.
Diversification Opportunities for Sumi Indo and Kabelindo Murni
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sumi and Kabelindo is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sumi Indo Kabel and Kabelindo Murni Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kabelindo Murni Tbk and Sumi Indo 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 Sumi Indo Kabel are associated (or correlated) with Kabelindo Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kabelindo Murni Tbk has no effect on the direction of Sumi Indo i.e., Sumi Indo and Kabelindo Murni go up and down completely randomly.
Pair Corralation between Sumi Indo and Kabelindo Murni
Assuming the 90 days trading horizon Sumi Indo Kabel is expected to generate 1.64 times more return on investment than Kabelindo Murni. However, Sumi Indo is 1.64 times more volatile than Kabelindo Murni Tbk. It trades about 0.06 of its potential returns per unit of risk. Kabelindo Murni Tbk is currently generating about 0.03 per unit of risk. If you would invest 19,740 in Sumi Indo Kabel on August 24, 2024 and sell it today you would earn a total of 21,260 from holding Sumi Indo Kabel or generate 107.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumi Indo Kabel vs. Kabelindo Murni Tbk
Performance |
| Timeline |
| Sumi Indo Kabel |
| Kabelindo Murni Tbk |
Sumi Indo and Kabelindo Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumi Indo and Kabelindo Murni
The main advantage of trading using opposite Sumi Indo and Kabelindo Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumi Indo position performs unexpectedly, Kabelindo Murni 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 Kabelindo Murni will offset losses from the drop in Kabelindo Murni's long position.| Sumi Indo vs. Jembo Cable | Sumi Indo vs. Kabelindo Murni Tbk | Sumi Indo vs. Indorama Synthetics Tbk | Sumi Indo vs. Indospring Tbk |
| Kabelindo Murni vs. Kmi Wire And | Kabelindo Murni vs. Jembo Cable | Kabelindo Murni vs. Sumi Indo Kabel | Kabelindo Murni vs. Voksel Electric 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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