Correlation Between Kalbe Farma and Buyung Poetra
Can any of the company-specific risk be diversified away by investing in both Kalbe Farma and Buyung Poetra 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 Buyung Poetra 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 Buyung Poetra Sembada, you can compare the effects of market volatilities on Kalbe Farma and Buyung Poetra 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 Buyung Poetra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalbe Farma and Buyung Poetra.
Diversification Opportunities for Kalbe Farma and Buyung Poetra
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kalbe and Buyung is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kalbe Farma Tbk and Buyung Poetra Sembada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buyung Poetra Sembada 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 Buyung Poetra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buyung Poetra Sembada has no effect on the direction of Kalbe Farma i.e., Kalbe Farma and Buyung Poetra go up and down completely randomly.
Pair Corralation between Kalbe Farma and Buyung Poetra
Assuming the 90 days trading horizon Kalbe Farma Tbk is expected to generate 0.52 times more return on investment than Buyung Poetra. However, Kalbe Farma Tbk is 1.93 times less risky than Buyung Poetra. It trades about -0.01 of its potential returns per unit of risk. Buyung Poetra Sembada is currently generating about -0.04 per unit of risk. If you would invest 160,720 in Kalbe Farma Tbk on August 29, 2024 and sell it today you would lose (11,720) from holding Kalbe Farma Tbk or give up 7.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kalbe Farma Tbk vs. Buyung Poetra Sembada
Performance |
| Timeline |
| Kalbe Farma Tbk |
| Buyung Poetra Sembada |
Kalbe Farma and Buyung Poetra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalbe Farma and Buyung Poetra
The main advantage of trading using opposite Kalbe Farma and Buyung Poetra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalbe Farma position performs unexpectedly, Buyung Poetra 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 Buyung Poetra will offset losses from the drop in Buyung Poetra'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 |
| Buyung Poetra vs. Integra Indocabinet Tbk | Buyung Poetra vs. Sariguna Primatirta PT | Buyung Poetra vs. Erajaya Swasembada Tbk | Buyung Poetra vs. Puradelta Lestari PT |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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