Correlation Between Kawasan Industri and Ramayana Lestari
Can any of the company-specific risk be diversified away by investing in both Kawasan Industri and Ramayana Lestari 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 Kawasan Industri and Ramayana Lestari into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kawasan Industri Jababeka and Ramayana Lestari Sentosa, you can compare the effects of market volatilities on Kawasan Industri and Ramayana Lestari 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 Kawasan Industri with a short position of Ramayana Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kawasan Industri and Ramayana Lestari.
Diversification Opportunities for Kawasan Industri and Ramayana Lestari
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kawasan and Ramayana is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kawasan Industri Jababeka and Ramayana Lestari Sentosa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramayana Lestari Sentosa and Kawasan Industri 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 Kawasan Industri Jababeka are associated (or correlated) with Ramayana Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramayana Lestari Sentosa has no effect on the direction of Kawasan Industri i.e., Kawasan Industri and Ramayana Lestari go up and down completely randomly.
Pair Corralation between Kawasan Industri and Ramayana Lestari
Assuming the 90 days trading horizon Kawasan Industri Jababeka is expected to generate 1.91 times more return on investment than Ramayana Lestari. However, Kawasan Industri is 1.91 times more volatile than Ramayana Lestari Sentosa. It trades about 0.22 of its potential returns per unit of risk. Ramayana Lestari Sentosa is currently generating about -0.15 per unit of risk. If you would invest 15,600 in Kawasan Industri Jababeka on August 28, 2024 and sell it today you would earn a total of 4,200 from holding Kawasan Industri Jababeka or generate 26.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kawasan Industri Jababeka vs. Ramayana Lestari Sentosa
Performance |
| Timeline |
| Kawasan Industri Jababeka |
| Ramayana Lestari Sentosa |
Kawasan Industri and Ramayana Lestari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kawasan Industri and Ramayana Lestari
The main advantage of trading using opposite Kawasan Industri and Ramayana Lestari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kawasan Industri position performs unexpectedly, Ramayana Lestari 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 Ramayana Lestari will offset losses from the drop in Ramayana Lestari's long position.| Kawasan Industri vs. Bakrieland Development Tbk | Kawasan Industri vs. Ciputra Development Tbk | Kawasan Industri vs. Sentul City Tbk | Kawasan Industri vs. Solusi Bangun Indonesia |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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