Correlation Between PT Kusuma and Indosat Tbk
Can any of the company-specific risk be diversified away by investing in both PT Kusuma and Indosat 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 PT Kusuma and Indosat Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Kusuma Kemindo and Indosat Tbk, you can compare the effects of market volatilities on PT Kusuma and Indosat 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 PT Kusuma with a short position of Indosat Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Kusuma and Indosat Tbk.
Diversification Opportunities for PT Kusuma and Indosat Tbk
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KKES and Indosat is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding PT Kusuma Kemindo and Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosat Tbk and PT Kusuma 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 PT Kusuma Kemindo are associated (or correlated) with Indosat Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosat Tbk has no effect on the direction of PT Kusuma i.e., PT Kusuma and Indosat Tbk go up and down completely randomly.
Pair Corralation between PT Kusuma and Indosat Tbk
Assuming the 90 days trading horizon PT Kusuma Kemindo is expected to under-perform the Indosat Tbk. But the stock apears to be less risky and, when comparing its historical volatility, PT Kusuma Kemindo is 1.12 times less risky than Indosat Tbk. The stock trades about -0.07 of its potential returns per unit of risk. The Indosat Tbk is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 580,641 in Indosat Tbk on September 12, 2024 and sell it today you would lose (335,641) from holding Indosat Tbk or give up 57.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
PT Kusuma Kemindo vs. Indosat Tbk
Performance |
| Timeline |
| PT Kusuma Kemindo |
| Indosat Tbk |
PT Kusuma and Indosat Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Kusuma and Indosat Tbk
The main advantage of trading using opposite PT Kusuma and Indosat Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Kusuma position performs unexpectedly, Indosat 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 Indosat Tbk will offset losses from the drop in Indosat Tbk's long position.| PT Kusuma vs. PT Hetzer Medical | PT Kusuma vs. Bangun Karya Perkasa | PT Kusuma vs. PT Dewi Shri | PT Kusuma vs. PT Sari Kreasi |
| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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