Correlation Between Kirana Megatara and Samudera Indonesia
Can any of the company-specific risk be diversified away by investing in both Kirana Megatara and Samudera Indonesia 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 Samudera Indonesia 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 Samudera Indonesia Tbk, you can compare the effects of market volatilities on Kirana Megatara and Samudera Indonesia 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 Samudera Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirana Megatara and Samudera Indonesia.
Diversification Opportunities for Kirana Megatara and Samudera Indonesia
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kirana and Samudera is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kirana Megatara Tbk and Samudera Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samudera Indonesia 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 Samudera Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samudera Indonesia Tbk has no effect on the direction of Kirana Megatara i.e., Kirana Megatara and Samudera Indonesia go up and down completely randomly.
Pair Corralation between Kirana Megatara and Samudera Indonesia
Assuming the 90 days trading horizon Kirana Megatara Tbk is expected to generate 1.46 times more return on investment than Samudera Indonesia. However, Kirana Megatara is 1.46 times more volatile than Samudera Indonesia Tbk. It trades about 0.03 of its potential returns per unit of risk. Samudera Indonesia Tbk is currently generating about 0.0 per unit of risk. If you would invest 25,800 in Kirana Megatara Tbk on August 31, 2024 and sell it today you would earn a total of 7,000 from holding Kirana Megatara Tbk or generate 27.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kirana Megatara Tbk vs. Samudera Indonesia Tbk
Performance |
| Timeline |
| Kirana Megatara Tbk |
| Samudera Indonesia Tbk |
Kirana Megatara and Samudera Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kirana Megatara and Samudera Indonesia
The main advantage of trading using opposite Kirana Megatara and Samudera Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirana Megatara position performs unexpectedly, Samudera Indonesia 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 Samudera Indonesia will offset losses from the drop in Samudera Indonesia'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 |
| Samudera Indonesia vs. Matahari Department Store | Samudera Indonesia vs. Multi Medika Internasional | Samudera Indonesia vs. Visi Media Asia | Samudera Indonesia vs. Bayan Resources 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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