Correlation Between Kalbe Farma and Multi Bintang
Can any of the company-specific risk be diversified away by investing in both Kalbe Farma and Multi Bintang 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 Multi Bintang 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 Multi Bintang Indonesia, you can compare the effects of market volatilities on Kalbe Farma and Multi Bintang 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 Multi Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalbe Farma and Multi Bintang.
Diversification Opportunities for Kalbe Farma and Multi Bintang
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kalbe and Multi is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kalbe Farma Tbk and Multi Bintang Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Bintang Indonesia 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 Multi Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Bintang Indonesia has no effect on the direction of Kalbe Farma i.e., Kalbe Farma and Multi Bintang go up and down completely randomly.
Pair Corralation between Kalbe Farma and Multi Bintang
Assuming the 90 days trading horizon Kalbe Farma Tbk is expected to generate 2.05 times more return on investment than Multi Bintang. However, Kalbe Farma is 2.05 times more volatile than Multi Bintang Indonesia. It trades about -0.03 of its potential returns per unit of risk. Multi Bintang Indonesia is currently generating about -0.06 per unit of risk. If you would invest 198,278 in Kalbe Farma Tbk on August 24, 2024 and sell it today you would lose (53,278) from holding Kalbe Farma Tbk or give up 26.87% 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. Multi Bintang Indonesia
Performance |
| Timeline |
| Kalbe Farma Tbk |
| Multi Bintang Indonesia |
Kalbe Farma and Multi Bintang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalbe Farma and Multi Bintang
The main advantage of trading using opposite Kalbe Farma and Multi Bintang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalbe Farma position performs unexpectedly, Multi Bintang 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 Multi Bintang will offset losses from the drop in Multi Bintang'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 |
| Multi Bintang vs. Charoen Pokphand Indonesia | Multi Bintang vs. Kalbe Farma Tbk | Multi Bintang vs. Indofood Cbp Sukses | Multi Bintang vs. PT Indofood Sukses |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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