Correlation Between First Media and Kalbe Farma
Can any of the company-specific risk be diversified away by investing in both First Media and Kalbe Farma 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 First Media and Kalbe Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Media Tbk and Kalbe Farma Tbk, you can compare the effects of market volatilities on First Media and Kalbe Farma 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 First Media with a short position of Kalbe Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Media and Kalbe Farma.
Diversification Opportunities for First Media and Kalbe Farma
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Kalbe is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding First Media Tbk and Kalbe Farma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalbe Farma Tbk and First Media 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 First Media Tbk are associated (or correlated) with Kalbe Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalbe Farma Tbk has no effect on the direction of First Media i.e., First Media and Kalbe Farma go up and down completely randomly.
Pair Corralation between First Media and Kalbe Farma
Assuming the 90 days trading horizon First Media Tbk is expected to generate 1.88 times more return on investment than Kalbe Farma. However, First Media is 1.88 times more volatile than Kalbe Farma Tbk. It trades about 0.02 of its potential returns per unit of risk. Kalbe Farma Tbk is currently generating about -0.02 per unit of risk. If you would invest 10,000 in First Media Tbk on August 28, 2024 and sell it today you would earn a total of 0.00 from holding First Media Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
First Media Tbk vs. Kalbe Farma Tbk
Performance |
| Timeline |
| First Media Tbk |
| Kalbe Farma Tbk |
First Media and Kalbe Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Media and Kalbe Farma
The main advantage of trading using opposite First Media and Kalbe Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Media position performs unexpectedly, Kalbe Farma 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 Kalbe Farma will offset losses from the drop in Kalbe Farma's long position.| First Media vs. Bekasi Fajar Industrial | First Media vs. Lion Metal Works | First Media vs. Alumindo Light Metal | First Media vs. Ashmore Asset Management |
| Kalbe Farma vs. Astra Graphia Tbk | Kalbe Farma vs. Hexindo Adiperkasa Tbk | Kalbe Farma vs. Lautan Luas Tbk | Kalbe Farma vs. Citra Marga Nusaphala |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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