Correlation Between Krakatau Steel and Perusahaan Gas
Can any of the company-specific risk be diversified away by investing in both Krakatau Steel and Perusahaan Gas 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 Krakatau Steel and Perusahaan Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krakatau Steel Persero and Perusahaan Gas Negara, you can compare the effects of market volatilities on Krakatau Steel and Perusahaan Gas 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 Krakatau Steel with a short position of Perusahaan Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krakatau Steel and Perusahaan Gas.
Diversification Opportunities for Krakatau Steel and Perusahaan Gas
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Krakatau and Perusahaan is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Krakatau Steel Persero and Perusahaan Gas Negara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Gas Negara and Krakatau Steel 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 Krakatau Steel Persero are associated (or correlated) with Perusahaan Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Gas Negara has no effect on the direction of Krakatau Steel i.e., Krakatau Steel and Perusahaan Gas go up and down completely randomly.
Pair Corralation between Krakatau Steel and Perusahaan Gas
Assuming the 90 days trading horizon Krakatau Steel Persero is expected to under-perform the Perusahaan Gas. In addition to that, Krakatau Steel is 1.44 times more volatile than Perusahaan Gas Negara. It trades about -0.29 of its total potential returns per unit of risk. Perusahaan Gas Negara is currently generating about 0.0 per unit of volatility. If you would invest 153,000 in Perusahaan Gas Negara on September 2, 2024 and sell it today you would lose (500.00) from holding Perusahaan Gas Negara or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krakatau Steel Persero vs. Perusahaan Gas Negara
Performance |
| Timeline |
| Krakatau Steel Persero |
| Perusahaan Gas Negara |
Krakatau Steel and Perusahaan Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krakatau Steel and Perusahaan Gas
The main advantage of trading using opposite Krakatau Steel and Perusahaan Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krakatau Steel position performs unexpectedly, Perusahaan Gas 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 Perusahaan Gas will offset losses from the drop in Perusahaan Gas' long position.| Krakatau Steel vs. Perusahaan Gas Negara | Krakatau Steel vs. Telkom Indonesia Tbk | Krakatau Steel vs. Mitra Pinasthika Mustika | Krakatau Steel vs. Jakarta Int Hotels |
| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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