Correlation Between Kedaung Indah and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both Kedaung Indah and Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa Tbk, you can compare the effects of market volatilities on Kedaung Indah and Trias Sentosa 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 Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedaung Indah and Trias Sentosa.
Diversification Opportunities for Kedaung Indah and Trias Sentosa
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kedaung and Trias is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kedaung Indah Can and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa 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 Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Kedaung Indah i.e., Kedaung Indah and Trias Sentosa go up and down completely randomly.
Pair Corralation between Kedaung Indah and Trias Sentosa
Assuming the 90 days trading horizon Kedaung Indah Can is expected to generate 2.34 times more return on investment than Trias Sentosa. However, Kedaung Indah is 2.34 times more volatile than Trias Sentosa Tbk. It trades about 0.03 of its potential returns per unit of risk. Trias Sentosa Tbk is currently generating about 0.0 per unit of risk. If you would invest 13,200 in Kedaung Indah Can on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Kedaung Indah Can or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kedaung Indah Can vs. Trias Sentosa Tbk
Performance |
| Timeline |
| Kedaung Indah Can |
| Trias Sentosa Tbk |
Kedaung Indah and Trias Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedaung Indah and Trias Sentosa
The main advantage of trading using opposite Kedaung Indah and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedaung Indah position performs unexpectedly, Trias Sentosa 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 Trias Sentosa will offset losses from the drop in Trias Sentosa'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 |
| Trias Sentosa vs. Suparma Tbk | Trias Sentosa vs. Champion Pacific Indonesia | Trias Sentosa vs. Indo Acidatama Tbk | Trias Sentosa vs. Unggul Indah Cahaya |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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