Correlation Between Kedaung Indah and PT Boston
Can any of the company-specific risk be diversified away by investing in both Kedaung Indah and PT Boston 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 PT Boston 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 PT Boston Furniture, you can compare the effects of market volatilities on Kedaung Indah and PT Boston 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 PT Boston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedaung Indah and PT Boston.
Diversification Opportunities for Kedaung Indah and PT Boston
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kedaung and SOFA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kedaung Indah Can and PT Boston Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Boston Furniture 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 PT Boston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Boston Furniture has no effect on the direction of Kedaung Indah i.e., Kedaung Indah and PT Boston go up and down completely randomly.
Pair Corralation between Kedaung Indah and PT Boston
Assuming the 90 days trading horizon Kedaung Indah is expected to generate 5.63 times less return on investment than PT Boston. In addition to that, Kedaung Indah is 1.69 times more volatile than PT Boston Furniture. It trades about 0.0 of its total potential returns per unit of risk. PT Boston Furniture is currently generating about 0.03 per unit of volatility. If you would invest 2,800 in PT Boston Furniture on September 3, 2024 and sell it today you would earn a total of 800.00 from holding PT Boston Furniture or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kedaung Indah Can vs. PT Boston Furniture
Performance |
| Timeline |
| Kedaung Indah Can |
| PT Boston Furniture |
Kedaung Indah and PT Boston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedaung Indah and PT Boston
The main advantage of trading using opposite Kedaung Indah and PT Boston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedaung Indah position performs unexpectedly, PT Boston 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 PT Boston will offset losses from the drop in PT Boston'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 |
| PT Boston vs. Mitra Pinasthika Mustika | PT Boston vs. Jakarta Int Hotels | PT Boston vs. Indosat Tbk | PT Boston vs. Inocycle Technology 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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