Correlation Between Kabelindo Murni and Asiaplast Industries
Can any of the company-specific risk be diversified away by investing in both Kabelindo Murni and Asiaplast Industries 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 Kabelindo Murni and Asiaplast Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kabelindo Murni Tbk and Asiaplast Industries Tbk, you can compare the effects of market volatilities on Kabelindo Murni and Asiaplast Industries 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 Kabelindo Murni with a short position of Asiaplast Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kabelindo Murni and Asiaplast Industries.
Diversification Opportunities for Kabelindo Murni and Asiaplast Industries
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kabelindo and Asiaplast is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kabelindo Murni Tbk and Asiaplast Industries Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiaplast Industries Tbk and Kabelindo Murni 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 Kabelindo Murni Tbk are associated (or correlated) with Asiaplast Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiaplast Industries Tbk has no effect on the direction of Kabelindo Murni i.e., Kabelindo Murni and Asiaplast Industries go up and down completely randomly.
Pair Corralation between Kabelindo Murni and Asiaplast Industries
Assuming the 90 days trading horizon Kabelindo Murni is expected to generate 3.09 times less return on investment than Asiaplast Industries. But when comparing it to its historical volatility, Kabelindo Murni Tbk is 1.76 times less risky than Asiaplast Industries. It trades about 0.03 of its potential returns per unit of risk. Asiaplast Industries Tbk is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 30,117 in Asiaplast Industries Tbk on January 25, 2025 and sell it today you would earn a total of 21,883 from holding Asiaplast Industries Tbk or generate 72.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kabelindo Murni Tbk vs. Asiaplast Industries Tbk
Performance |
| Timeline |
| Kabelindo Murni Tbk |
| Asiaplast Industries Tbk |
Kabelindo Murni and Asiaplast Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kabelindo Murni and Asiaplast Industries
The main advantage of trading using opposite Kabelindo Murni and Asiaplast Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kabelindo Murni position performs unexpectedly, Asiaplast Industries 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 Asiaplast Industries will offset losses from the drop in Asiaplast Industries' long position.| Kabelindo Murni vs. PT Temas Tbk | Kabelindo Murni vs. Dosni Roha Indonesia | Kabelindo Murni vs. Rig Tenders Tbk | Kabelindo Murni vs. Samudera Indonesia Tbk |
| Asiaplast Industries vs. Argha Karya Prima | Asiaplast Industries vs. Alumindo Light Metal | Asiaplast Industries vs. Anugerah Kagum Karya | Asiaplast Industries vs. Asahimas Flat Glass |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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