Correlation Between Kedaung Indah and Impack Pratama
Can any of the company-specific risk be diversified away by investing in both Kedaung Indah and Impack Pratama 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 Kedaung Indah and Impack Pratama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kedaung Indah Can and Impack Pratama Industri, you can compare the effects of market volatilities on Kedaung Indah and Impack Pratama 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 Kedaung Indah with a short position of Impack Pratama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedaung Indah and Impack Pratama.
Diversification Opportunities for Kedaung Indah and Impack Pratama
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kedaung and Impack is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kedaung Indah Can and Impack Pratama Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impack Pratama Industri and Kedaung Indah 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 Kedaung Indah Can are associated (or correlated) with Impack Pratama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impack Pratama Industri has no effect on the direction of Kedaung Indah i.e., Kedaung Indah and Impack Pratama go up and down completely randomly.
Pair Corralation between Kedaung Indah and Impack Pratama
Assuming the 90 days trading horizon Kedaung Indah is expected to generate 1.7 times less return on investment than Impack Pratama. In addition to that, Kedaung Indah is 2.39 times more volatile than Impack Pratama Industri. It trades about 0.01 of its total potential returns per unit of risk. Impack Pratama Industri is currently generating about 0.03 per unit of volatility. If you would invest 27,259 in Impack Pratama Industri on August 29, 2024 and sell it today you would earn a total of 6,141 from holding Impack Pratama Industri or generate 22.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kedaung Indah Can vs. Impack Pratama Industri
Performance |
| Timeline |
| Kedaung Indah Can |
| Impack Pratama Industri |
Kedaung Indah and Impack Pratama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedaung Indah and Impack Pratama
The main advantage of trading using opposite Kedaung Indah and Impack Pratama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedaung Indah position performs unexpectedly, Impack Pratama 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 Impack Pratama will offset losses from the drop in Impack Pratama's long position.| Kedaung Indah vs. Langgeng Makmur Industri | Kedaung Indah vs. Kedawung Setia Industrial | Kedaung Indah vs. Mustika Ratu Tbk | Kedaung Indah vs. Kabelindo Murni Tbk |
| Impack Pratama vs. Medikaloka Hermina PT | Impack Pratama vs. Lotte Chemical Titan | Impack Pratama vs. Mark Dynamics Indonesia | Impack Pratama vs. Garudafood Putra Putri |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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