Correlation Between Kedaung Indah and Semen Baturaja
Can any of the company-specific risk be diversified away by investing in both Kedaung Indah and Semen Baturaja 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 Semen Baturaja 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 Semen Baturaja Persero, you can compare the effects of market volatilities on Kedaung Indah and Semen Baturaja 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 Semen Baturaja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedaung Indah and Semen Baturaja.
Diversification Opportunities for Kedaung Indah and Semen Baturaja
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kedaung and Semen is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kedaung Indah Can and Semen Baturaja Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semen Baturaja Persero 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 Semen Baturaja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semen Baturaja Persero has no effect on the direction of Kedaung Indah i.e., Kedaung Indah and Semen Baturaja go up and down completely randomly.
Pair Corralation between Kedaung Indah and Semen Baturaja
Assuming the 90 days trading horizon Kedaung Indah Can is expected to generate 2.3 times more return on investment than Semen Baturaja. However, Kedaung Indah is 2.3 times more volatile than Semen Baturaja Persero. It trades about 0.0 of its potential returns per unit of risk. Semen Baturaja Persero is currently generating about -0.05 per unit of risk. If you would invest 22,400 in Kedaung Indah Can on August 26, 2024 and sell it today you would lose (10,400) from holding Kedaung Indah Can or give up 46.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kedaung Indah Can vs. Semen Baturaja Persero
Performance |
| Timeline |
| Kedaung Indah Can |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Semen Baturaja Persero |
Kedaung Indah and Semen Baturaja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedaung Indah and Semen Baturaja
The main advantage of trading using opposite Kedaung Indah and Semen Baturaja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedaung Indah position performs unexpectedly, Semen Baturaja 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 Semen Baturaja will offset losses from the drop in Semen Baturaja's long position.| Kedaung Indah vs. Kedawung Setia Industrial | Kedaung Indah vs. Kabelindo Murni Tbk | Kedaung Indah vs. Lion Metal Works |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |