Correlation Between Kedaung Indah and Suparma Tbk
Can any of the company-specific risk be diversified away by investing in both Kedaung Indah and Suparma Tbk 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 Suparma Tbk 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 Suparma Tbk, you can compare the effects of market volatilities on Kedaung Indah and Suparma Tbk 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 Suparma Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedaung Indah and Suparma Tbk.
Diversification Opportunities for Kedaung Indah and Suparma Tbk
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kedaung and Suparma is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kedaung Indah Can and Suparma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suparma Tbk 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 Suparma Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suparma Tbk has no effect on the direction of Kedaung Indah i.e., Kedaung Indah and Suparma Tbk go up and down completely randomly.
Pair Corralation between Kedaung Indah and Suparma Tbk
Assuming the 90 days trading horizon Kedaung Indah Can is expected to under-perform the Suparma Tbk. In addition to that, Kedaung Indah is 2.71 times more volatile than Suparma Tbk. It trades about -0.14 of its total potential returns per unit of risk. Suparma Tbk is currently generating about -0.24 per unit of volatility. If you would invest 32,000 in Suparma Tbk on August 29, 2024 and sell it today you would lose (2,000) from holding Suparma Tbk or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kedaung Indah Can vs. Suparma Tbk
Performance |
| Timeline |
| Kedaung Indah Can |
| Suparma Tbk |
Kedaung Indah and Suparma Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedaung Indah and Suparma Tbk
The main advantage of trading using opposite Kedaung Indah and Suparma Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedaung Indah position performs unexpectedly, Suparma Tbk 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 Suparma Tbk will offset losses from the drop in Suparma Tbk'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 |
| Suparma Tbk vs. Trias Sentosa Tbk | Suparma Tbk vs. Slj Global Tbk | Suparma Tbk vs. PT Sreeya Sewu | Suparma Tbk vs. Indo Acidatama 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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