Correlation Between Kalbe Farma and Sariguna Primatirta
Can any of the company-specific risk be diversified away by investing in both Kalbe Farma and Sariguna Primatirta 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 Sariguna Primatirta 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 Sariguna Primatirta PT, you can compare the effects of market volatilities on Kalbe Farma and Sariguna Primatirta 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 Sariguna Primatirta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalbe Farma and Sariguna Primatirta.
Diversification Opportunities for Kalbe Farma and Sariguna Primatirta
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kalbe and Sariguna is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kalbe Farma Tbk and Sariguna Primatirta PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sariguna Primatirta 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 Sariguna Primatirta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sariguna Primatirta has no effect on the direction of Kalbe Farma i.e., Kalbe Farma and Sariguna Primatirta go up and down completely randomly.
Pair Corralation between Kalbe Farma and Sariguna Primatirta
Assuming the 90 days trading horizon Kalbe Farma Tbk is expected to under-perform the Sariguna Primatirta. But the stock apears to be less risky and, when comparing its historical volatility, Kalbe Farma Tbk is 1.19 times less risky than Sariguna Primatirta. The stock trades about -0.12 of its potential returns per unit of risk. The Sariguna Primatirta PT is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 117,000 in Sariguna Primatirta PT on August 29, 2024 and sell it today you would earn a total of 4,500 from holding Sariguna Primatirta PT or generate 3.85% 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. Sariguna Primatirta PT
Performance |
| Timeline |
| Kalbe Farma Tbk |
| Sariguna Primatirta |
Kalbe Farma and Sariguna Primatirta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalbe Farma and Sariguna Primatirta
The main advantage of trading using opposite Kalbe Farma and Sariguna Primatirta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalbe Farma position performs unexpectedly, Sariguna Primatirta 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 Sariguna Primatirta will offset losses from the drop in Sariguna Primatirta'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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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