Correlation Between Kencana Energi and Uni Charm
Can any of the company-specific risk be diversified away by investing in both Kencana Energi and Uni Charm 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 Kencana Energi and Uni Charm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kencana Energi Lestari and Uni Charm Indonesia, you can compare the effects of market volatilities on Kencana Energi and Uni Charm 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 Kencana Energi with a short position of Uni Charm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kencana Energi and Uni Charm.
Diversification Opportunities for Kencana Energi and Uni Charm
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kencana and Uni is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kencana Energi Lestari and Uni Charm Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni Charm Indonesia and Kencana Energi 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 Kencana Energi Lestari are associated (or correlated) with Uni Charm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni Charm Indonesia has no effect on the direction of Kencana Energi i.e., Kencana Energi and Uni Charm go up and down completely randomly.
Pair Corralation between Kencana Energi and Uni Charm
Assuming the 90 days trading horizon Kencana Energi Lestari is expected to generate 1.62 times more return on investment than Uni Charm. However, Kencana Energi is 1.62 times more volatile than Uni Charm Indonesia. It trades about 0.0 of its potential returns per unit of risk. Uni Charm Indonesia is currently generating about -0.05 per unit of risk. If you would invest 68,635 in Kencana Energi Lestari on September 1, 2024 and sell it today you would lose (5,135) from holding Kencana Energi Lestari or give up 7.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Kencana Energi Lestari vs. Uni Charm Indonesia
Performance |
| Timeline |
| Kencana Energi Lestari |
| Uni Charm Indonesia |
Kencana Energi and Uni Charm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kencana Energi and Uni Charm
The main advantage of trading using opposite Kencana Energi and Uni Charm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kencana Energi position performs unexpectedly, Uni Charm 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 Uni Charm will offset losses from the drop in Uni Charm's long position.| Kencana Energi vs. PT Indonesia Kendaraan | Kencana Energi vs. Cikarang Listrindo Tbk | Kencana Energi vs. Jasa Armada Indonesia | Kencana Energi vs. Pelita Samudera Shipping |
| Uni Charm vs. Kino Indonesia Tbk | Uni Charm vs. Garudafood Putra Putri | Uni Charm vs. Mulia Boga Raya | Uni Charm vs. Ultra Jaya Milk |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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