Correlation Between Indosat Tbk and PT Kusuma
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk 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 Indosat Tbk and PT Kusuma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and PT Kusuma Kemindo, you can compare the effects of market volatilities on Indosat Tbk 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 Indosat Tbk with a short position of PT Kusuma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and PT Kusuma.
Diversification Opportunities for Indosat Tbk and PT Kusuma
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indosat and KKES is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk 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 Indosat Tbk 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 Indosat Tbk 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 Indosat Tbk i.e., Indosat Tbk and PT Kusuma go up and down completely randomly.
Pair Corralation between Indosat Tbk and PT Kusuma
Assuming the 90 days trading horizon Indosat Tbk is expected to generate 1.15 times less return on investment than PT Kusuma. But when comparing it to its historical volatility, Indosat Tbk is 1.42 times less risky than PT Kusuma. It trades about 0.22 of its potential returns per unit of risk. PT Kusuma Kemindo is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,500 in PT Kusuma Kemindo on September 12, 2024 and sell it today you would earn a total of 400.00 from holding PT Kusuma Kemindo or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. PT Kusuma Kemindo
Performance |
| Timeline |
| Indosat Tbk |
| PT Kusuma Kemindo |
Indosat Tbk and PT Kusuma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and PT Kusuma
The main advantage of trading using opposite Indosat Tbk and PT Kusuma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk 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.| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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