Correlation Between Kimia Farma and Indofarma Tbk
Can any of the company-specific risk be diversified away by investing in both Kimia Farma and Indofarma Tbk 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 Kimia Farma and Indofarma Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimia Farma Persero and Indofarma Tbk, you can compare the effects of market volatilities on Kimia Farma and Indofarma Tbk 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 Kimia Farma with a short position of Indofarma Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimia Farma and Indofarma Tbk.
Diversification Opportunities for Kimia Farma and Indofarma Tbk
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kimia and Indofarma is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kimia Farma Persero and Indofarma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indofarma Tbk and Kimia Farma 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 Kimia Farma Persero are associated (or correlated) with Indofarma Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indofarma Tbk has no effect on the direction of Kimia Farma i.e., Kimia Farma and Indofarma Tbk go up and down completely randomly.
Pair Corralation between Kimia Farma and Indofarma Tbk
If you would invest 12,600 in Indofarma Tbk on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Indofarma Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Kimia Farma Persero vs. Indofarma Tbk
Performance |
| Timeline |
| Kimia Farma Persero |
| Indofarma Tbk |
Kimia Farma and Indofarma Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimia Farma and Indofarma Tbk
The main advantage of trading using opposite Kimia Farma and Indofarma Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimia Farma position performs unexpectedly, Indofarma Tbk 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 Indofarma Tbk will offset losses from the drop in Indofarma Tbk's long position.| Kimia Farma vs. Matahari Department Store | Kimia Farma vs. Surya Citra Media | Kimia Farma vs. Lippo Karawaci Tbk |
| Indofarma Tbk vs. Matahari Department Store | Indofarma Tbk vs. Surya Citra Media | Indofarma Tbk vs. Lippo Karawaci 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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