Correlation Between Kalbe Farma and Sumber Alfaria
Can any of the company-specific risk be diversified away by investing in both Kalbe Farma and Sumber Alfaria 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 Sumber Alfaria 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 Sumber Alfaria Trijaya, you can compare the effects of market volatilities on Kalbe Farma and Sumber Alfaria 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 Sumber Alfaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalbe Farma and Sumber Alfaria.
Diversification Opportunities for Kalbe Farma and Sumber Alfaria
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kalbe and Sumber is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kalbe Farma Tbk and Sumber Alfaria Trijaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Alfaria Trijaya 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 Sumber Alfaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Alfaria Trijaya has no effect on the direction of Kalbe Farma i.e., Kalbe Farma and Sumber Alfaria go up and down completely randomly.
Pair Corralation between Kalbe Farma and Sumber Alfaria
Assuming the 90 days trading horizon Kalbe Farma Tbk is expected to under-perform the Sumber Alfaria. But the stock apears to be less risky and, when comparing its historical volatility, Kalbe Farma Tbk is 1.06 times less risky than Sumber Alfaria. The stock trades about -0.03 of its potential returns per unit of risk. The Sumber Alfaria Trijaya is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 284,142 in Sumber Alfaria Trijaya on August 29, 2024 and sell it today you would earn a total of 6,858 from holding Sumber Alfaria Trijaya or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kalbe Farma Tbk vs. Sumber Alfaria Trijaya
Performance |
| Timeline |
| Kalbe Farma Tbk |
| Sumber Alfaria Trijaya |
Kalbe Farma and Sumber Alfaria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalbe Farma and Sumber Alfaria
The main advantage of trading using opposite Kalbe Farma and Sumber Alfaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalbe Farma position performs unexpectedly, Sumber Alfaria 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 Sumber Alfaria will offset losses from the drop in Sumber Alfaria's long position.| Kalbe Farma vs. PT Indofood Sukses | Kalbe Farma vs. Unilever Indonesia Tbk | Kalbe Farma vs. Semen Indonesia Persero | Kalbe Farma vs. United Tractors Tbk |
| Sumber Alfaria vs. Elang Mahkota Teknologi | Sumber Alfaria vs. Ace Hardware Indonesia | Sumber Alfaria vs. BFI Finance Indonesia | Sumber Alfaria vs. Tower Bersama Infrastructure |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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