Correlation Between Kirana Megatara and Hexindo Adiperkasa
Can any of the company-specific risk be diversified away by investing in both Kirana Megatara and Hexindo Adiperkasa 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 Kirana Megatara and Hexindo Adiperkasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kirana Megatara Tbk and Hexindo Adiperkasa Tbk, you can compare the effects of market volatilities on Kirana Megatara and Hexindo Adiperkasa 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 Kirana Megatara with a short position of Hexindo Adiperkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirana Megatara and Hexindo Adiperkasa.
Diversification Opportunities for Kirana Megatara and Hexindo Adiperkasa
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kirana and Hexindo is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kirana Megatara Tbk and Hexindo Adiperkasa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexindo Adiperkasa Tbk and Kirana Megatara 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 Kirana Megatara Tbk are associated (or correlated) with Hexindo Adiperkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexindo Adiperkasa Tbk has no effect on the direction of Kirana Megatara i.e., Kirana Megatara and Hexindo Adiperkasa go up and down completely randomly.
Pair Corralation between Kirana Megatara and Hexindo Adiperkasa
Assuming the 90 days trading horizon Kirana Megatara Tbk is expected to generate 2.2 times more return on investment than Hexindo Adiperkasa. However, Kirana Megatara is 2.2 times more volatile than Hexindo Adiperkasa Tbk. It trades about -0.15 of its potential returns per unit of risk. Hexindo Adiperkasa Tbk is currently generating about -0.55 per unit of risk. If you would invest 37,000 in Kirana Megatara Tbk on August 28, 2024 and sell it today you would lose (3,400) from holding Kirana Megatara Tbk or give up 9.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kirana Megatara Tbk vs. Hexindo Adiperkasa Tbk
Performance |
| Timeline |
| Kirana Megatara Tbk |
| Hexindo Adiperkasa Tbk |
Kirana Megatara and Hexindo Adiperkasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kirana Megatara and Hexindo Adiperkasa
The main advantage of trading using opposite Kirana Megatara and Hexindo Adiperkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirana Megatara position performs unexpectedly, Hexindo Adiperkasa 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 Hexindo Adiperkasa will offset losses from the drop in Hexindo Adiperkasa's long position.| Kirana Megatara vs. Emdeki Utama Tbk | Kirana Megatara vs. Panca Budi Idaman | Kirana Megatara vs. Mark Dynamics Indonesia | Kirana Megatara vs. Map Boga Adiperkasa |
| Hexindo Adiperkasa vs. Bisi International Tbk | Hexindo Adiperkasa vs. Sampoerna Agro Tbk | Hexindo Adiperkasa vs. Akr Corporindo Tbk | Hexindo Adiperkasa vs. Solusi Bangun Indonesia |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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