Correlation Between Kalbe Farma and Eagle High
Can any of the company-specific risk be diversified away by investing in both Kalbe Farma and Eagle High 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 Eagle High 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 Eagle High Plantations, you can compare the effects of market volatilities on Kalbe Farma and Eagle High 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 Eagle High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalbe Farma and Eagle High.
Diversification Opportunities for Kalbe Farma and Eagle High
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kalbe and Eagle is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kalbe Farma Tbk and Eagle High Plantations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle High Plantations 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 Eagle High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle High Plantations has no effect on the direction of Kalbe Farma i.e., Kalbe Farma and Eagle High go up and down completely randomly.
Pair Corralation between Kalbe Farma and Eagle High
Assuming the 90 days trading horizon Kalbe Farma Tbk is expected to generate 0.74 times more return on investment than Eagle High. However, Kalbe Farma Tbk is 1.34 times less risky than Eagle High. It trades about -0.2 of its potential returns per unit of risk. Eagle High Plantations is currently generating about -0.21 per unit of risk. If you would invest 160,500 in Kalbe Farma Tbk on August 31, 2024 and sell it today you would lose (11,000) from holding Kalbe Farma Tbk or give up 6.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kalbe Farma Tbk vs. Eagle High Plantations
Performance |
| Timeline |
| Kalbe Farma Tbk |
| Eagle High Plantations |
Kalbe Farma and Eagle High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalbe Farma and Eagle High
The main advantage of trading using opposite Kalbe Farma and Eagle High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalbe Farma position performs unexpectedly, Eagle High 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 Eagle High will offset losses from the drop in Eagle High'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 |
| Eagle High vs. Perusahaan Perkebunan London | Eagle High vs. Salim Ivomas Pratama | Eagle High vs. Alam Sutera Realty | Eagle High vs. Delta Dunia Makmur |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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