Correlation Between Kalbe Farma and Gozco Plantations
Can any of the company-specific risk be diversified away by investing in both Kalbe Farma and Gozco Plantations 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 Gozco Plantations 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 Gozco Plantations Tbk, you can compare the effects of market volatilities on Kalbe Farma and Gozco Plantations 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 Gozco Plantations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalbe Farma and Gozco Plantations.
Diversification Opportunities for Kalbe Farma and Gozco Plantations
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kalbe and Gozco is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kalbe Farma Tbk and Gozco Plantations Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gozco Plantations Tbk 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 Gozco Plantations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gozco Plantations Tbk has no effect on the direction of Kalbe Farma i.e., Kalbe Farma and Gozco Plantations go up and down completely randomly.
Pair Corralation between Kalbe Farma and Gozco Plantations
Assuming the 90 days trading horizon Kalbe Farma Tbk is expected to under-perform the Gozco Plantations. But the stock apears to be less risky and, when comparing its historical volatility, Kalbe Farma Tbk is 1.42 times less risky than Gozco Plantations. The stock trades about -0.23 of its potential returns per unit of risk. The Gozco Plantations Tbk is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 10,200 in Gozco Plantations Tbk on August 27, 2024 and sell it today you would lose (600.00) from holding Gozco Plantations Tbk or give up 5.88% 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. Gozco Plantations Tbk
Performance |
| Timeline |
| Kalbe Farma Tbk |
| Gozco Plantations Tbk |
Kalbe Farma and Gozco Plantations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalbe Farma and Gozco Plantations
The main advantage of trading using opposite Kalbe Farma and Gozco Plantations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalbe Farma position performs unexpectedly, Gozco Plantations 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 Gozco Plantations will offset losses from the drop in Gozco Plantations' 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 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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