Correlation Between Kmi Wire and Kabelindo Murni
Can any of the company-specific risk be diversified away by investing in both Kmi Wire and Kabelindo Murni 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 Kmi Wire and Kabelindo Murni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kmi Wire And and Kabelindo Murni Tbk, you can compare the effects of market volatilities on Kmi Wire and Kabelindo Murni 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 Kmi Wire with a short position of Kabelindo Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kmi Wire and Kabelindo Murni.
Diversification Opportunities for Kmi Wire and Kabelindo Murni
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kmi and Kabelindo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kmi Wire And and Kabelindo Murni Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kabelindo Murni Tbk and Kmi Wire 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 Kmi Wire And are associated (or correlated) with Kabelindo Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kabelindo Murni Tbk has no effect on the direction of Kmi Wire i.e., Kmi Wire and Kabelindo Murni go up and down completely randomly.
Pair Corralation between Kmi Wire and Kabelindo Murni
Assuming the 90 days trading horizon Kmi Wire And is expected to generate 0.78 times more return on investment than Kabelindo Murni. However, Kmi Wire And is 1.29 times less risky than Kabelindo Murni. It trades about 0.05 of its potential returns per unit of risk. Kabelindo Murni Tbk is currently generating about 0.04 per unit of risk. If you would invest 32,294 in Kmi Wire And on August 24, 2024 and sell it today you would earn a total of 6,306 from holding Kmi Wire And or generate 19.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kmi Wire And vs. Kabelindo Murni Tbk
Performance |
| Timeline |
| Kmi Wire And |
| Kabelindo Murni Tbk |
Kmi Wire and Kabelindo Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kmi Wire and Kabelindo Murni
The main advantage of trading using opposite Kmi Wire and Kabelindo Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kmi Wire position performs unexpectedly, Kabelindo Murni 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 Kabelindo Murni will offset losses from the drop in Kabelindo Murni's long position.| Kmi Wire vs. Kabelindo Murni Tbk | Kmi Wire vs. Jembo Cable | Kmi Wire vs. Gajah Tunggal Tbk | Kmi Wire vs. Indospring Tbk |
| Kabelindo Murni vs. Kmi Wire And | Kabelindo Murni vs. Jembo Cable | Kabelindo Murni vs. Sumi Indo Kabel | Kabelindo Murni vs. Voksel Electric 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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