Correlation Between Kedaung Indah and Unggul Indah
Can any of the company-specific risk be diversified away by investing in both Kedaung Indah and Unggul Indah 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 Unggul Indah 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 Unggul Indah Cahaya, you can compare the effects of market volatilities on Kedaung Indah and Unggul Indah 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 Unggul Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedaung Indah and Unggul Indah.
Diversification Opportunities for Kedaung Indah and Unggul Indah
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kedaung and Unggul is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kedaung Indah Can and Unggul Indah Cahaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unggul Indah Cahaya 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 Unggul Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unggul Indah Cahaya has no effect on the direction of Kedaung Indah i.e., Kedaung Indah and Unggul Indah go up and down completely randomly.
Pair Corralation between Kedaung Indah and Unggul Indah
Assuming the 90 days trading horizon Kedaung Indah Can is expected to under-perform the Unggul Indah. In addition to that, Kedaung Indah is 6.91 times more volatile than Unggul Indah Cahaya. It trades about -0.14 of its total potential returns per unit of risk. Unggul Indah Cahaya is currently generating about -0.3 per unit of volatility. If you would invest 820,000 in Unggul Indah Cahaya on August 29, 2024 and sell it today you would lose (25,000) from holding Unggul Indah Cahaya or give up 3.05% 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. Unggul Indah Cahaya
Performance |
| Timeline |
| Kedaung Indah Can |
| Unggul Indah Cahaya |
Kedaung Indah and Unggul Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedaung Indah and Unggul Indah
The main advantage of trading using opposite Kedaung Indah and Unggul Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedaung Indah position performs unexpectedly, Unggul Indah 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 Unggul Indah will offset losses from the drop in Unggul Indah'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 |
| Unggul Indah vs. Kedaung Indah Can | Unggul Indah vs. Langgeng Makmur Industri | Unggul Indah vs. Kabelindo Murni Tbk | Unggul Indah vs. Mustika Ratu 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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