Correlation Between Kedawung Setia and Timah Persero
Can any of the company-specific risk be diversified away by investing in both Kedawung Setia and Timah Persero 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 Timah Persero 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 Timah Persero Tbk, you can compare the effects of market volatilities on Kedawung Setia and Timah Persero 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 Timah Persero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedawung Setia and Timah Persero.
Diversification Opportunities for Kedawung Setia and Timah Persero
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kedawung and Timah is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kedawung Setia Industrial and Timah Persero Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timah Persero Tbk 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 Timah Persero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timah Persero Tbk has no effect on the direction of Kedawung Setia i.e., Kedawung Setia and Timah Persero go up and down completely randomly.
Pair Corralation between Kedawung Setia and Timah Persero
Assuming the 90 days trading horizon Kedawung Setia Industrial is expected to generate 1.0 times more return on investment than Timah Persero. However, Kedawung Setia Industrial is 1.0 times less risky than Timah Persero. It trades about -0.05 of its potential returns per unit of risk. Timah Persero Tbk is currently generating about -0.29 per unit of risk. If you would invest 46,000 in Kedawung Setia Industrial on September 4, 2024 and sell it today you would lose (2,600) from holding Kedawung Setia Industrial or give up 5.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kedawung Setia Industrial vs. Timah Persero Tbk
Performance |
| Timeline |
| Kedawung Setia Industrial |
| Timah Persero Tbk |
Kedawung Setia and Timah Persero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedawung Setia and Timah Persero
The main advantage of trading using opposite Kedawung Setia and Timah Persero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedawung Setia position performs unexpectedly, Timah Persero 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 Timah Persero will offset losses from the drop in Timah Persero's long position.| Kedawung Setia vs. Timah Persero Tbk | Kedawung Setia vs. Semen Indonesia Persero | Kedawung Setia vs. Mitra Pinasthika Mustika | Kedawung Setia vs. Jakarta Int Hotels |
| Timah Persero vs. Vale Indonesia Tbk | Timah Persero vs. Aneka Tambang Persero | Timah Persero vs. Bukit Asam Tbk | Timah Persero vs. Perusahaan Gas Negara |
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.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |