Correlation Between Intanwijaya Internasional and Kokoh Inti
Can any of the company-specific risk be diversified away by investing in both Intanwijaya Internasional and Kokoh Inti 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 Intanwijaya Internasional and Kokoh Inti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intanwijaya Internasional Tbk and Kokoh Inti Arebama, you can compare the effects of market volatilities on Intanwijaya Internasional and Kokoh Inti 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 Intanwijaya Internasional with a short position of Kokoh Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intanwijaya Internasional and Kokoh Inti.
Diversification Opportunities for Intanwijaya Internasional and Kokoh Inti
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intanwijaya and Kokoh is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Intanwijaya Internasional Tbk and Kokoh Inti Arebama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kokoh Inti Arebama and Intanwijaya Internasional 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 Intanwijaya Internasional Tbk are associated (or correlated) with Kokoh Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kokoh Inti Arebama has no effect on the direction of Intanwijaya Internasional i.e., Intanwijaya Internasional and Kokoh Inti go up and down completely randomly.
Pair Corralation between Intanwijaya Internasional and Kokoh Inti
Assuming the 90 days trading horizon Intanwijaya Internasional Tbk is expected to generate 0.79 times more return on investment than Kokoh Inti. However, Intanwijaya Internasional Tbk is 1.26 times less risky than Kokoh Inti. It trades about -0.1 of its potential returns per unit of risk. Kokoh Inti Arebama is currently generating about -0.14 per unit of risk. If you would invest 60,000 in Intanwijaya Internasional Tbk on September 3, 2024 and sell it today you would lose (2,000) from holding Intanwijaya Internasional Tbk or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Intanwijaya Internasional Tbk vs. Kokoh Inti Arebama
Performance |
| Timeline |
| Intanwijaya Internasional |
| Kokoh Inti Arebama |
Intanwijaya Internasional and Kokoh Inti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intanwijaya Internasional and Kokoh Inti
The main advantage of trading using opposite Intanwijaya Internasional and Kokoh Inti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intanwijaya Internasional position performs unexpectedly, Kokoh Inti 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 Kokoh Inti will offset losses from the drop in Kokoh Inti's long position.The idea behind Intanwijaya Internasional Tbk and Kokoh Inti Arebama 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.
| Kokoh Inti vs. Intanwijaya Internasional Tbk | Kokoh Inti vs. Champion Pacific Indonesia | Kokoh Inti vs. Mitra Pinasthika Mustika | Kokoh Inti vs. Jakarta Int Hotels |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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