Correlation Between Kedawung Setia and Kedaung Indah
Can any of the company-specific risk be diversified away by investing in both Kedawung Setia and Kedaung Indah 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 Kedawung Setia and Kedaung Indah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kedawung Setia Industrial and Kedaung Indah Can, you can compare the effects of market volatilities on Kedawung Setia and Kedaung Indah 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 Kedawung Setia with a short position of Kedaung Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedawung Setia and Kedaung Indah.
Diversification Opportunities for Kedawung Setia and Kedaung Indah
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kedawung and Kedaung is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kedawung Setia Industrial and Kedaung Indah Can in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedaung Indah Can and Kedawung Setia 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 Kedawung Setia Industrial are associated (or correlated) with Kedaung Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedaung Indah Can has no effect on the direction of Kedawung Setia i.e., Kedawung Setia and Kedaung Indah go up and down completely randomly.
Pair Corralation between Kedawung Setia and Kedaung Indah
Assuming the 90 days trading horizon Kedawung Setia Industrial is expected to generate 2.16 times more return on investment than Kedaung Indah. However, Kedawung Setia is 2.16 times more volatile than Kedaung Indah Can. It trades about 0.02 of its potential returns per unit of risk. Kedaung Indah Can is currently generating about -0.07 per unit of risk. If you would invest 45,000 in Kedawung Setia Industrial on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Kedawung Setia Industrial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kedawung Setia Industrial vs. Kedaung Indah Can
Performance |
| Timeline |
| Kedawung Setia Industrial |
| Kedaung Indah Can |
Kedawung Setia and Kedaung Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedawung Setia and Kedaung Indah
The main advantage of trading using opposite Kedawung Setia and Kedaung Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedawung Setia position performs unexpectedly, Kedaung Indah 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 Kedaung Indah will offset losses from the drop in Kedaung Indah's long position.| Kedawung Setia vs. Kedaung Indah Can | Kedawung Setia vs. Langgeng Makmur Industri | Kedawung Setia vs. Kabelindo Murni Tbk | Kedawung Setia vs. Mustika Ratu Tbk |
| Kedaung Indah vs. Langgeng Makmur Industri | Kedaung Indah vs. Kedawung Setia Industrial | Kedaung Indah vs. Mustika Ratu Tbk | Kedaung Indah vs. Kabelindo Murni 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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