Correlation Between Kabelindo Murni and Indo Acidatama
Can any of the company-specific risk be diversified away by investing in both Kabelindo Murni and Indo Acidatama 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 Indo Acidatama 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 Indo Acidatama Tbk, you can compare the effects of market volatilities on Kabelindo Murni and Indo Acidatama 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 Indo Acidatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kabelindo Murni and Indo Acidatama.
Diversification Opportunities for Kabelindo Murni and Indo Acidatama
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kabelindo and Indo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kabelindo Murni Tbk and Indo Acidatama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Acidatama 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 Indo Acidatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Acidatama Tbk has no effect on the direction of Kabelindo Murni i.e., Kabelindo Murni and Indo Acidatama go up and down completely randomly.
Pair Corralation between Kabelindo Murni and Indo Acidatama
Assuming the 90 days trading horizon Kabelindo Murni Tbk is expected to generate 1.71 times more return on investment than Indo Acidatama. However, Kabelindo Murni is 1.71 times more volatile than Indo Acidatama Tbk. It trades about 0.03 of its potential returns per unit of risk. Indo Acidatama Tbk is currently generating about -0.17 per unit of risk. If you would invest 30,800 in Kabelindo Murni Tbk on August 24, 2024 and sell it today you would earn a total of 200.00 from holding Kabelindo Murni Tbk or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kabelindo Murni Tbk vs. Indo Acidatama Tbk
Performance |
| Timeline |
| Kabelindo Murni Tbk |
| Indo Acidatama Tbk |
Kabelindo Murni and Indo Acidatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kabelindo Murni and Indo Acidatama
The main advantage of trading using opposite Kabelindo Murni and Indo Acidatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kabelindo Murni position performs unexpectedly, Indo Acidatama 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 Indo Acidatama will offset losses from the drop in Indo Acidatama'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 |
| Indo Acidatama vs. Kedaung Indah Can | Indo Acidatama vs. Langgeng Makmur Industri | Indo Acidatama vs. Kabelindo Murni Tbk | Indo Acidatama 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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