Correlation Between Kalbe Farma and Akasha Wira
Can any of the company-specific risk be diversified away by investing in both Kalbe Farma and Akasha Wira 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 Kalbe Farma and Akasha Wira into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kalbe Farma Tbk and Akasha Wira International, you can compare the effects of market volatilities on Kalbe Farma and Akasha Wira 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 Kalbe Farma with a short position of Akasha Wira. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalbe Farma and Akasha Wira.
Diversification Opportunities for Kalbe Farma and Akasha Wira
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kalbe and Akasha is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kalbe Farma Tbk and Akasha Wira International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akasha Wira International and Kalbe Farma 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 Kalbe Farma Tbk are associated (or correlated) with Akasha Wira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akasha Wira International has no effect on the direction of Kalbe Farma i.e., Kalbe Farma and Akasha Wira go up and down completely randomly.
Pair Corralation between Kalbe Farma and Akasha Wira
Assuming the 90 days trading horizon Kalbe Farma Tbk is expected to under-perform the Akasha Wira. But the stock apears to be less risky and, when comparing its historical volatility, Kalbe Farma Tbk is 1.28 times less risky than Akasha Wira. The stock trades about -0.01 of its potential returns per unit of risk. The Akasha Wira International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 967,500 in Akasha Wira International on August 25, 2024 and sell it today you would earn a total of 15,000 from holding Akasha Wira International or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kalbe Farma Tbk vs. Akasha Wira International
Performance |
| Timeline |
| Kalbe Farma Tbk |
| Akasha Wira International |
Kalbe Farma and Akasha Wira Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalbe Farma and Akasha Wira
The main advantage of trading using opposite Kalbe Farma and Akasha Wira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalbe Farma position performs unexpectedly, Akasha Wira 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 Akasha Wira will offset losses from the drop in Akasha Wira's long position.| Kalbe Farma vs. Astra Graphia Tbk | Kalbe Farma vs. Hexindo Adiperkasa Tbk | Kalbe Farma vs. Lautan Luas Tbk | Kalbe Farma vs. Citra Marga Nusaphala |
| Akasha Wira vs. Charoen Pokphand Indonesia | Akasha Wira vs. Kalbe Farma Tbk | Akasha Wira vs. Indofood Cbp Sukses | Akasha Wira vs. Akr Corporindo 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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