Correlation Between Armada Berjaya and Kioson Komersial
Can any of the company-specific risk be diversified away by investing in both Armada Berjaya and Kioson Komersial 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 Armada Berjaya and Kioson Komersial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Berjaya Trans and Kioson Komersial Indonesia, you can compare the effects of market volatilities on Armada Berjaya and Kioson Komersial 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 Armada Berjaya with a short position of Kioson Komersial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Berjaya and Kioson Komersial.
Diversification Opportunities for Armada Berjaya and Kioson Komersial
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Armada and Kioson is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Armada Berjaya Trans and Kioson Komersial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kioson Komersial Ind and Armada Berjaya 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 Armada Berjaya Trans are associated (or correlated) with Kioson Komersial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kioson Komersial Ind has no effect on the direction of Armada Berjaya i.e., Armada Berjaya and Kioson Komersial go up and down completely randomly.
Pair Corralation between Armada Berjaya and Kioson Komersial
Assuming the 90 days trading horizon Armada Berjaya Trans is expected to under-perform the Kioson Komersial. In addition to that, Armada Berjaya is 2.8 times more volatile than Kioson Komersial Indonesia. It trades about -0.23 of its total potential returns per unit of risk. Kioson Komersial Indonesia is currently generating about -0.07 per unit of volatility. If you would invest 5,100 in Kioson Komersial Indonesia on August 24, 2024 and sell it today you would lose (100.00) from holding Kioson Komersial Indonesia or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Berjaya Trans vs. Kioson Komersial Indonesia
Performance |
| Timeline |
| Armada Berjaya Trans |
| Kioson Komersial Ind |
Armada Berjaya and Kioson Komersial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Berjaya and Kioson Komersial
The main advantage of trading using opposite Armada Berjaya and Kioson Komersial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Berjaya position performs unexpectedly, Kioson Komersial 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 Kioson Komersial will offset losses from the drop in Kioson Komersial's long position.| Armada Berjaya vs. Sinergi Inti Plastindo | Armada Berjaya vs. Hartadinata Abadi Tbk | Armada Berjaya vs. Weha Transportasi Indonesia | Armada Berjaya vs. Dewata Freight International |
| Kioson Komersial vs. M Cash Integrasi | Kioson Komersial vs. NFC Indonesia PT | Kioson Komersial vs. Multipolar Technology Tbk | Kioson Komersial vs. Digital Mediatama Maxima |
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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