Correlation Between Kabelindo Murni and Gajah Tunggal
Can any of the company-specific risk be diversified away by investing in both Kabelindo Murni and Gajah Tunggal 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 Gajah Tunggal 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 Gajah Tunggal Tbk, you can compare the effects of market volatilities on Kabelindo Murni and Gajah Tunggal 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 Gajah Tunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kabelindo Murni and Gajah Tunggal.
Diversification Opportunities for Kabelindo Murni and Gajah Tunggal
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kabelindo and Gajah is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kabelindo Murni Tbk and Gajah Tunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gajah Tunggal 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 Gajah Tunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gajah Tunggal Tbk has no effect on the direction of Kabelindo Murni i.e., Kabelindo Murni and Gajah Tunggal go up and down completely randomly.
Pair Corralation between Kabelindo Murni and Gajah Tunggal
Assuming the 90 days trading horizon Kabelindo Murni Tbk is expected to generate 0.46 times more return on investment than Gajah Tunggal. However, Kabelindo Murni Tbk is 2.18 times less risky than Gajah Tunggal. It trades about -0.05 of its potential returns per unit of risk. Gajah Tunggal Tbk is currently generating about -0.04 per unit of risk. If you would invest 31,200 in Kabelindo Murni Tbk on August 30, 2024 and sell it today you would lose (600.00) from holding Kabelindo Murni Tbk or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kabelindo Murni Tbk vs. Gajah Tunggal Tbk
Performance |
| Timeline |
| Kabelindo Murni Tbk |
| Gajah Tunggal Tbk |
Kabelindo Murni and Gajah Tunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kabelindo Murni and Gajah Tunggal
The main advantage of trading using opposite Kabelindo Murni and Gajah Tunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kabelindo Murni position performs unexpectedly, Gajah Tunggal 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 Gajah Tunggal will offset losses from the drop in Gajah Tunggal's long position.| Kabelindo Murni vs. Kmi Wire And | Kabelindo Murni vs. Jembo Cable | Kabelindo Murni vs. Sumi Indo Kabel | Kabelindo Murni vs. Voksel Electric Tbk |
| Gajah Tunggal vs. Perusahaan Perkebunan London | Gajah Tunggal vs. Solusi Bangun Indonesia | Gajah Tunggal vs. Ciputra Development Tbk | Gajah Tunggal vs. Global Mediacom 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 Stocks Directory module to find actively traded stocks across global markets.
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