Correlation Between Kabelindo Murni and Ricky Putra
Can any of the company-specific risk be diversified away by investing in both Kabelindo Murni and Ricky Putra 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 Ricky Putra 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 Ricky Putra Globalindo, you can compare the effects of market volatilities on Kabelindo Murni and Ricky Putra 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 Ricky Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kabelindo Murni and Ricky Putra.
Diversification Opportunities for Kabelindo Murni and Ricky Putra
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kabelindo and Ricky is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kabelindo Murni Tbk and Ricky Putra Globalindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ricky Putra Globalindo 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 Ricky Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ricky Putra Globalindo has no effect on the direction of Kabelindo Murni i.e., Kabelindo Murni and Ricky Putra go up and down completely randomly.
Pair Corralation between Kabelindo Murni and Ricky Putra
Assuming the 90 days trading horizon Kabelindo Murni Tbk is expected to generate 0.9 times more return on investment than Ricky Putra. However, Kabelindo Murni Tbk is 1.11 times less risky than Ricky Putra. It trades about 0.04 of its potential returns per unit of risk. Ricky Putra Globalindo is currently generating about -0.15 per unit of risk. If you would invest 30,400 in Kabelindo Murni Tbk on August 28, 2024 and sell it today you would earn a total of 400.00 from holding Kabelindo Murni Tbk or generate 1.32% 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. Ricky Putra Globalindo
Performance |
| Timeline |
| Kabelindo Murni Tbk |
| Ricky Putra Globalindo |
Kabelindo Murni and Ricky Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kabelindo Murni and Ricky Putra
The main advantage of trading using opposite Kabelindo Murni and Ricky Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kabelindo Murni position performs unexpectedly, Ricky Putra 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 Ricky Putra will offset losses from the drop in Ricky Putra's long position.The idea behind Kabelindo Murni Tbk and Ricky Putra Globalindo 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.| Ricky Putra vs. Pan Brothers Tbk | Ricky Putra vs. Sunson Textile Manufacturer | Ricky Putra vs. Asia Pacific Fibers | Ricky Putra vs. Prima Alloy Steel |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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