Correlation Between PT Kusuma and PT Sari
Can any of the company-specific risk be diversified away by investing in both PT Kusuma and PT Sari 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 PT Sari 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 PT Sari Kreasi, you can compare the effects of market volatilities on PT Kusuma and PT Sari 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 PT Sari. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Kusuma and PT Sari.
Diversification Opportunities for PT Kusuma and PT Sari
Very good diversification
The 3 months correlation between KKES and RAFI is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PT Kusuma Kemindo and PT Sari Kreasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sari Kreasi 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 PT Sari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sari Kreasi has no effect on the direction of PT Kusuma i.e., PT Kusuma and PT Sari go up and down completely randomly.
Pair Corralation between PT Kusuma and PT Sari
Assuming the 90 days trading horizon PT Kusuma Kemindo is expected to under-perform the PT Sari. But the stock apears to be less risky and, when comparing its historical volatility, PT Kusuma Kemindo is 1.23 times less risky than PT Sari. The stock trades about -0.1 of its potential returns per unit of risk. The PT Sari Kreasi is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 4,947 in PT Sari Kreasi on September 2, 2024 and sell it today you would lose (1,847) from holding PT Sari Kreasi or give up 37.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Kusuma Kemindo vs. PT Sari Kreasi
Performance |
| Timeline |
| PT Kusuma Kemindo |
| PT Sari Kreasi |
PT Kusuma and PT Sari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Kusuma and PT Sari
The main advantage of trading using opposite PT Kusuma and PT Sari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Kusuma position performs unexpectedly, PT Sari 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 PT Sari will offset losses from the drop in PT Sari'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 |
| PT Sari vs. PT Dewi Shri | PT Sari vs. Bangun Karya Perkasa | PT Sari vs. Gaya Abadi Sempurna | PT Sari vs. Habco Trans Maritima |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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