Correlation Between Kmi Wire and Kedaung Indah
Can any of the company-specific risk be diversified away by investing in both Kmi Wire and Kedaung Indah 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 Kedaung Indah 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 Kedaung Indah Can, you can compare the effects of market volatilities on Kmi Wire and Kedaung Indah 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 Kedaung Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kmi Wire and Kedaung Indah.
Diversification Opportunities for Kmi Wire and Kedaung Indah
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kmi and Kedaung is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kmi Wire And and Kedaung Indah Can in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedaung Indah Can 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 Kedaung Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedaung Indah Can has no effect on the direction of Kmi Wire i.e., Kmi Wire and Kedaung Indah go up and down completely randomly.
Pair Corralation between Kmi Wire and Kedaung Indah
Assuming the 90 days trading horizon Kmi Wire is expected to generate 1.68 times less return on investment than Kedaung Indah. But when comparing it to its historical volatility, Kmi Wire And is 3.8 times less risky than Kedaung Indah. It trades about 0.05 of its potential returns per unit of risk. Kedaung Indah Can is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14,400 in Kedaung Indah Can on August 27, 2024 and sell it today you would lose (2,400) from holding Kedaung Indah Can or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kmi Wire And vs. Kedaung Indah Can
Performance |
| Timeline |
| Kmi Wire And |
| Kedaung Indah Can |
Kmi Wire and Kedaung Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kmi Wire and Kedaung Indah
The main advantage of trading using opposite Kmi Wire and Kedaung Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kmi Wire position performs unexpectedly, Kedaung Indah 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 Kedaung Indah will offset losses from the drop in Kedaung Indah'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 |
| Kedaung Indah vs. Langgeng Makmur Industri | Kedaung Indah vs. Kedawung Setia Industrial | Kedaung Indah vs. Mustika Ratu Tbk | Kedaung Indah vs. Kabelindo Murni 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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