Correlation Between Indosat Tbk and Krakatau Steel
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Krakatau Steel 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 Krakatau Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Krakatau Steel Persero, you can compare the effects of market volatilities on Indosat Tbk 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 Indosat Tbk with a short position of Krakatau Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Krakatau Steel.
Diversification Opportunities for Indosat Tbk and Krakatau Steel
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indosat and Krakatau is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk 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 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 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 Indosat Tbk i.e., Indosat Tbk and Krakatau Steel go up and down completely randomly.
Pair Corralation between Indosat Tbk and Krakatau Steel
Assuming the 90 days trading horizon Indosat Tbk is expected to under-perform the Krakatau Steel. In addition to that, Indosat Tbk is 1.73 times more volatile than Krakatau Steel Persero. It trades about -0.09 of its total potential returns per unit of risk. Krakatau Steel Persero is currently generating about 0.02 per unit of volatility. If you would invest 11,500 in Krakatau Steel Persero on September 2, 2024 and sell it today you would earn a total of 300.00 from holding Krakatau Steel Persero or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. Krakatau Steel Persero
Performance |
| Timeline |
| Indosat Tbk |
| Krakatau Steel Persero |
Indosat Tbk and Krakatau Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and Krakatau Steel
The main advantage of trading using opposite Indosat Tbk and Krakatau Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk 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.| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
| Krakatau Steel vs. Perusahaan Gas Negara | Krakatau Steel vs. Telkom Indonesia Tbk | Krakatau Steel vs. Mitra Pinasthika Mustika | Krakatau Steel 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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