Correlation Between Kalbe Farma and Fks Multi
Can any of the company-specific risk be diversified away by investing in both Kalbe Farma and Fks Multi 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 Fks Multi 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 Fks Multi Agro, you can compare the effects of market volatilities on Kalbe Farma and Fks Multi 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 Fks Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalbe Farma and Fks Multi.
Diversification Opportunities for Kalbe Farma and Fks Multi
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kalbe and Fks is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kalbe Farma Tbk and Fks Multi Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fks Multi Agro 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 Fks Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fks Multi Agro has no effect on the direction of Kalbe Farma i.e., Kalbe Farma and Fks Multi go up and down completely randomly.
Pair Corralation between Kalbe Farma and Fks Multi
Assuming the 90 days trading horizon Kalbe Farma Tbk is expected to under-perform the Fks Multi. In addition to that, Kalbe Farma is 11.06 times more volatile than Fks Multi Agro. It trades about -0.31 of its total potential returns per unit of risk. Fks Multi Agro is currently generating about -0.31 per unit of volatility. If you would invest 1,100,000 in Fks Multi Agro on August 25, 2024 and sell it today you would lose (10,000) from holding Fks Multi Agro or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kalbe Farma Tbk vs. Fks Multi Agro
Performance |
| Timeline |
| Kalbe Farma Tbk |
| Fks Multi Agro |
Kalbe Farma and Fks Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalbe Farma and Fks Multi
The main advantage of trading using opposite Kalbe Farma and Fks Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalbe Farma position performs unexpectedly, Fks Multi 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 Fks Multi will offset losses from the drop in Fks Multi'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 |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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