Correlation Between Kabelindo Murni and Saranacentral Bajatama
Can any of the company-specific risk be diversified away by investing in both Kabelindo Murni and Saranacentral Bajatama 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 Saranacentral Bajatama 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 Saranacentral Bajatama Tbk, you can compare the effects of market volatilities on Kabelindo Murni and Saranacentral Bajatama 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 Saranacentral Bajatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kabelindo Murni and Saranacentral Bajatama.
Diversification Opportunities for Kabelindo Murni and Saranacentral Bajatama
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kabelindo and Saranacentral is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kabelindo Murni Tbk and Saranacentral Bajatama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saranacentral Bajatama 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 Saranacentral Bajatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saranacentral Bajatama has no effect on the direction of Kabelindo Murni i.e., Kabelindo Murni and Saranacentral Bajatama go up and down completely randomly.
Pair Corralation between Kabelindo Murni and Saranacentral Bajatama
Assuming the 90 days trading horizon Kabelindo Murni Tbk is expected to generate 0.65 times more return on investment than Saranacentral Bajatama. However, Kabelindo Murni Tbk is 1.53 times less risky than Saranacentral Bajatama. It trades about 0.04 of its potential returns per unit of risk. Saranacentral Bajatama Tbk is currently generating about 0.0 per unit of risk. If you would invest 22,636 in Kabelindo Murni Tbk on August 28, 2024 and sell it today you would earn a total of 8,164 from holding Kabelindo Murni Tbk or generate 36.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kabelindo Murni Tbk vs. Saranacentral Bajatama Tbk
Performance |
| Timeline |
| Kabelindo Murni Tbk |
| Saranacentral Bajatama |
Kabelindo Murni and Saranacentral Bajatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kabelindo Murni and Saranacentral Bajatama
The main advantage of trading using opposite Kabelindo Murni and Saranacentral Bajatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kabelindo Murni position performs unexpectedly, Saranacentral Bajatama 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 Saranacentral Bajatama will offset losses from the drop in Saranacentral Bajatama's long position.The idea behind Kabelindo Murni Tbk and Saranacentral Bajatama Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Saranacentral Bajatama vs. Kedaung Indah Can | Saranacentral Bajatama vs. Langgeng Makmur Industri | Saranacentral Bajatama vs. Kabelindo Murni Tbk | Saranacentral Bajatama vs. Mustika Ratu 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |